Think Facebook, think Mark Zuckerberg. The two are inseparable.
Or are they?
Ever since his days as a precocious Harvard-student-turned-entrepreneur, Zuckerberg has been synonymous with Facebook in the minds of the social network’s users, rivals and investors.
But what if the unthinkable should happen: What if Zuckerberg should leave the company? It’s hard to imagine what a post-Zuckerberg Facebook would look like, but it’s the job of the company’s board members to plan for such major disruptions — and planning for it they are.
The multibillionaire and company founder has shown no signs that he has any plans to drop the reins of his Internet empire — in fact, he recently strengthened his control. That, however, hasn’t stopped Facebook’s board members from concocting a contingency plan. They have proposed wresting majority voting control of the company from Zuckerberg should he duck out of Facebook’s management, according to a proxy filing to the US Securities and Exchange Commission on Thursday.
It might appear harsh, but this is no coup. Facebook’s board members are caretakers of the company and need to plan for how they would handle any events that might throw the company off course. Part of that means ensuring any future CEO of Facebook wouldn’t have limited management powers if an absent Zuckerberg were to keep a controlling stake in the business.
The proposed plan, if Zuckerberg leaves the company, is to convert his Class B shares, which in the case of Facebook have more voting power, into Class A shares, which have less voting power. That is, he would keep his 14.8 percent economic stake in the company, while seeing his 53.8 percent voting power reduced.
“These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company,” said the board in the filing. It is set to vote on whether to reclassify Zuckerberg’s stock at the next shareholder meeting on June 20.
In spite of all that, Zuckerberg’s future at the company looks as strong as ever. The special committee appointed by Facebook’s board to put together the proposal made it clear in the filing that keeping the founder on board for as long as possible is a priority when they were assembling the proposal.
“The Special Committee and our board of directors believe the reclassification is an appropriate way to make it more likely that Mr. Zuckerberg will remain in a leadership role, and thus in a position to influence our direction for many years, and we believe that this influence has been and will be beneficial to our growth, strategy, and stability,” they said.