The lawsuit accuses Facebook’s board of not representing the interests of those holding stock in the company, and focuses on a change to its stock structure that took place earlier this year.
Facebook CEO Mark Zuckerberg holds a majority share and voting, which gives him control over the company. By trying to sell this stock and still have control of the company –in order to fund his new philanthropy efforts– he incurred in “self-interested agglomeration of power” according to the plaintiffs.
Zuckerberg proposed creating a new class of shares for himself that would let that happen, and three board members were placed on a special committee to represent shareholders in the discussions. They were tasked with deciding whether Zuckerberg’s request to sell stock but maintain control was fair to other shareholders. The committee eventually agreed to Zuckerberg’s plan. The suit alleges that the plan diluted other shareholders’ votes over the stock.
New texts messages that were released in the process, state that Zuckerberg was motivated by a desire to work in government while still retaining control of Facebook. The documents state that one of the concessions that Zuckerberg wanted was to be allowed to serve two years in government without loosing control of Facebook.
The transcript of the texts reads as follows:
“I think the biggest remaining issue is still around the government service,” –Andreseen.
“Erskine is just massively uncomfortable with you getting to low economic ownership and then going off on leave with no involvement by the board and retaining control,” he said.
“We rediscuss it on every call … I’m going to try to drag it over the line one more time. ☺ ”
“He’s worried that it’s the straw that breaks the camel’s back on the optics of good governance.”
“He’s worried it’s the thing people will point to on announcement and say ‘what the fuck are you guys doing agreeing to this’ Particularly since he thinks gov’t service would require you to give up control of FB anyway and it’s a moot point.”
“My counter argument is that because it’s likely a moot point let’s just give on it and it will probably never matter.”
The case, –and the texts– are not quite clear about what are Zuckerberg’s government ambitions or whether he already has a particular role of preference.