Matt Levine, Columnist

Mark Zuckerberg Gets to Control Facebook a While Longer

He wants to sell lots of shares and cure all of humanity's disease. He also wants to stay in charge.

April 28, 2016 at 6:26 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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Yesterday Facebook announced earnings, which were good. They were so good, in fact, that Facebook also announced a little present for Mark Zuckerberg, the co-founder and chief executive officer who got it to this happy place. Facebook said that it will create a new class of common stock, Facebook's third, to ensure that Zuckerberg can control Facebook as long as he wants to. Right now, Facebook has Class A stock, the normal publicly traded stock, with one vote per share, and Class B stock, mostly held by Zuckerberg, which has 10 votes per share. This structure, combined with a proxy agreement in which Zuckerberg gets to vote another shareholder's B shares, gives him voting control of the company even though he only owns about 15 percent of it economically1461856614665:

Under the new proposal, holders will get two new Class C shares for each A or B share they now hold. The Class C shares will have zero votes. The math will now look like this1461795050689: