Out if curiosity, what is it that MZ engineered / or accomplished that lead to his current control?
It still boggles the mind that the investors place such a small premium on the right to vote.
I am trying to see how one could defend this type of structure.
It is the ultimate "having your cake and eating it" deal for the founder.
MZ could build a giant money hole with FB money in Antarctica and there is nothing shareholders could do.
It should not be possible to have it both ways as a founder: own minority of shares and yet keep the control.
You want full control? Then do not dilute yourself.
It used to be normal for the founder(s) to have the most (but not the majority) of the shares. See Gates/Allen at Microsoft.
This meant that usually shareholder vote went their way, but there was a possibility that you could get ousted. See Jobs at Apple circa 1985.
It should not be possible to be the absolute king of a publicly owned company while owning less than 50% of a company.
"A string of voting arrangements outlined in Facebook’s SEC filing show that some of the company’s most powerful shareholders have ceded their voting rights to Zuckerberg, the company’s chief executive. While Zuckerberg only owns 28.2 percent of the Facebook’s shares, the additional “shares subject to voting proxy” gives him an additional 30.6 percent of the voting power, leaving him with a total of 56.9 percent of the shareholder voting power. That gives Zuckerberg full control of the company’s decisionmaking.
Under the arrangement, Dustin Moscovitz, Sean Parker, and a host of other Silicon Valley bigwigs have given Zuckerberg “irrevocable proxy” to control their votes. That means that their shares will swing with his shares.
Zuckerberg also has irrevocable control over shares held by DST, Greylock, Accel Partners, and other major firms and investors — and the voting rights that go along with those shares — in most circumstances.
“This is not common at all,” said Menlo Ventures partner Mark Siegel, who has monitored quite a few IPOs in his time in Silicon Valley and spoke to VentureBeat by phone today.
“He negotiated a very unique deal,” said Siegel of Zuckerberg’s coup. While no one knows exactly why Moscovitz, Parker, and a slew of high-powered VC firms would have given up their votes, Siegel speculated, “I’m sure there’s a point where shares were offered with that as a contingency.”"