Thanks to the special shares he owns, Facebook’s CEO Mark Zuckerberg gets majority voting control when it comes to the company. What happens if he leaves the company though? Facebook is taking care of that right now.
Under the current company certificate of incorporation, if Zuckerberg were to quit or get fired, he would retain his majority control of the company. Upon his death, his estate would still keep the control and could pass it on to his wife or daughter.
Facebook has decided to change the rules so that if Zuckerberg ever leaves the company, he won’t still hold onto that control. By changing the company’s certificate of incorporation, Zuckerberg’s majorty voting control will only be good while he is an executive at the company. The change also means that he won’t be able to pass down his control to any descendents (such as his daughter) in the even of his death.
“These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company,” Facebook’s board wrote in its proxy filing.
Zuckerberg isn’t expected to leave anytime soon, but this new change allows Facebook to make sure that the next CEO doesn’t have to be stuck on Zuckerberg or his family.
Disclaimer: We have no position in Facebook (NASDAQ: FB) and have not been compensated for this article.