Facebook is dropping a plan to restructure its stock, which would have allowed CEO Mark Zuckerberg to retain control of the company even as he planned to sell his shares for philanthropic causes.
Zuckerberg said Friday he's still committed to his philanthropic efforts, but will fund it without the stock change.
"Over the past year and a half, Facebook's business has performed well and the value of our stock has grown to the point that I can fully fund our philanthropy and retain voting control of Facebook for 20 years or more," he wrote on his Facebook page.
After his first daughter, Max, was born in December 2015, Zuckerberg and his wife, Priscilla, announced a new organization called the Chan Zuckerberg Initiative to focus on charitable work and philanthropy. At the time, he pledged to give away 99 percent of his wealth over his lifetime. On Friday, he said the vow still stands.
"I want to be clear: this doesn't change Priscilla and my plans to give away 99 percent of our Facebook shares during our lives," Zuckerberg said. He said he'd sell 35 million to 75 million Facebook shares in the next 18 months to fund his philanthropy, which includes projects in education and health.
The restructuring was to create a new class of non-voting shares. In April 2016, the proposal became the target of a class-action lawsuit by some investors who argued the restructuring could lessen their value in the company. The case was set to go to trial in Delaware next week, with Zuckerberg scheduled to testify on Tuesday.
The decision to drop the restructuring proposal highlights a power struggle at Facebook, as shareholders sought to block the plan from taking shape. And it must come as some form of relief to Zuckerberg. The CEO has been under increased scrutiny lately as Facebook deals with its scale and influence.Facebook is turning over 3,000 Russian-linked ads to Congress as part of a federal investigation into possible Russian meddling in the 2016 US election. A high-profile public testimony was probably the last thing he needed. Now he won't have to take the stand.
First published Sept. 22,12:26 p.m. PT.
Update at 2:05 p.m. PT: Adds details from Zuckerberg's Facebook post.
Correction at 3:12 p.m. PT: This post initially misstated the status of the lawsuit. It has not been settled.
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