Facebook has Class A shares that each get one vote.
Facebook has Class B shares that each get ten votes.
The board has Class B shares.
The Zuckerbergs control most of the Class B shares.
Enough to have a majority of the votes.
That's what owners of Class A shares bought into when they bought their Class A shares.
If the article didn't ignore this, it would be a lot less interesting. So it does.
It perverts the open market and reminds me of shenanigans in Eastern European stock markets and Asian ones where it is the norm for minority shareholders to be left out to dry.
It creates a conflict of interest for those with more voting rights than ownership. Usually the interests are aligned but there are no checks and balances anymore.
In the old days a corporate raider could challenge a badly run company and threaten to overturn the board.
So now you have 14% of company but have 65% of voting rights you can do whatever to those 85% "minority" shareholders.
So those with Class B shares get to have their cake and eat it too.
This is close to FB building a 5B money hole(https://www.youtube.com/watch?v=JnX-D4kkPOQ) in a desert.
Good point. It makes no difference if the other shareholders have 1 or 0 votes per share. They have no control of the company, they just loaned it money - in practice they have variable yield bonds.
Also, viewed that way, the company has a much smaller market cap and a huge debt.
[1] https://www.legalzoom.com/articles/incorporating-in-delaware...
Businesses pay money to settle legal issues all the time.
The larger payment settled the issue (with the Federal Government). The smaller alternative would not have (according to the article).
In the end some shareholders disagree with other shareholders.
And anyone can sue anyone.