Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

How Mark Zuckerberg will avoid testifying in court

A year ago, Mark Zuckerberg announced a complicated plan to change the shareholder structure of Facebook. The idea was to keep control of the company, and free up billions of dollars for his charitable efforts focused on curing diseases and improving education.
On Friday, he reversed that plan -- days before he was set to appear in court to defend it.
Facebook's board had approved Zuckerberg's proposal to create a new kind of stock, known as Class C shares, that wouldn't have rights or the ability to vote on corporate policy.

Zuckerberg, who controls the majority of voting rights in Facebook (FB, Tech30), would have sold the Class C shares and deployed those funds to a philanthropic effort he set up with his wife, Priscilla Chan.

But the stock of Facebook, which is up 31% in the past year, has done so well that Zuckerberg says he will be able to fund his philanthropy and maintain control of the company for more than 20 years.

"The idea was that it would allow me to keep voting control of Facebook so we can continue to build for the long term, but also allow Priscilla and me to fund the work we're doing through the Chan Zuckerberg Initiative," he wrote in a Facebook post.

Zuckerberg wrote that he and Chan still intend to donate 99% of their Facebook stock during their lives. He said he plans to sell between 35 million and 75 million shares in the next 18 months "to fund our work in education, science, and advocacy."

Facebook closed Friday at $170.54 a share. At that level, the shares Zuckerberg expects to sell to make his donations are worth between $6 billion and $13 billion.

The reversal also allows Zuckerberg to avoid having to appear in court on Tuesday.

He was set to testify in Delaware in a lawsuit brought by shareholders who were contesting the proposed change in Facebook stock, which would have allowed Zuckerberg to keep control even while shedding shares.

"We're thrilled that Facebook has dropped the reclassification," shareholder attorney Stuart Grant of Grant & Eisenhofer said in a statement. Grant was preparing to cross-examine Zuckerberg at trial.

"Stopping the issuance of the non-voting C shares is all the relief we were asking for at trial. Today's move is a total victory for stockholders."
Non-voting shares are controversial in Silicon Valley; companies use them to allow founders to keep unfettered control of startups that grow into major companies.

"The fact that he's withdrawing is a positive sign for those opposed to non-voting stock," said Charles M. Elson, professor of corporate governance at the University of Delaware. "I think it signals a nervousness with the concept, and I think that will serve as a warning sign to others contemplating a similar action."
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
×