As Facebook’s boss Mark Zuckerberg unveiled plans for the biggest ever initial public offering of shares by an internet company he also made it clear he will continue to exercise almost complete control over the company, leaving investors with little say.
Zuckerberg will control almost 56.9 percent of the voting shares in the company which is expected to be valued at up to 76 billion euros when it goes public.
The sale should make him worth around 21 billion euros as he owns just over 28 percent of the company’s stock. That would ranking the 27-year-old as the fourth-richest person in the United States.
Facebook will not need to appoint a majority of independent directors or set up board committees to oversee compensation and other matters.
The company’s ownership structure and bylaws go against shareholder-friendly corporate governance practices put in place in the United States after years of investor activism.
As Facebook states in its prospectus, Zuckerberg will “control all matters submitted to stockholders for vote, as well as the overall management and direction of our company.”
Zuckerberg struck deals with several Facebook investors that granted him voting rights over their shares in all or most situations. Those included Yuri Milner’s DST Global, venture capital firm The Founders Fund, and entities affiliated with Technology Crossover Ventures, the IPO filing shows.
Zuckerberg agreed to cut his compensation from $1.48 million (1.13 million euros) last year to $1 (0.76 euro cents) effective January 1, 2013, following the example of Apple founder Steve Jobs.
Facebook’s chief operating officer and Zuckerberg’s top lieutenant, Sheryl Sandberg, earned $30.8 million (23.5 million euros) in total compensation last year.