Facebook today, as part of its earnings release, said it would add a new class of non-voting stock for the company, which will keep Mark Zuckerberg in control of the company.

“This proposal is designed to create a capital structure that will, among other things, allow us to remain focused on Mr. Zuckerberg’s long-term vision for our company and encourage Mr. Zuckerberg to remain in an active leadership role at Facebook,” the company said as part of the release.

With the restructuring, people that are buying into Facebook with what’s called “class C” stock will not have any voting rights. That gives Zuckerberg, who has control of the company, increased protection against agitation from investors and focus on Facebook’s core strategy.

Of course, that strategy has been working so far — the company showed a significant earnings beat today and its stock is up more than 8%. But if Facebook were to ever turn south, this would ensure that Zuckerberg is in control of the company’s strategy moving forward.

This isn’t unfamiliar territory. Google (now Alphabet) has also issued a dual-class structure that includes non-voting stock, further helping Sergey Brin and Larry Page maintain control of the company.

This is all subject to approval at the company’s stockholders meeting, but if approved, the company will issue two shares of Class C stock as a dividend for each outstanding share of Class A and Class B common stock.

Here’s Zuckerberg’s rationale for the change in structure:

Everything we do at Facebook is focused on our mission to make the world more open and connected.

To maintain our focus on this mission, we have always been a founder-led company. This structure has helped us resist the short term pressures that often hurt companies. It has helped us grow our community, build our business and create shareholder value. It has given us the freedom to prioritize your product experience and invest in new apps like Instagram — decisions that don’t always pay off right away, but that we believe help us serve our community and our shareholders.

When I look out at the future, I see more bold moves ahead of us than behind us. We’re focused not on what Facebook is today, but on what it can be, and what it needs to be for our community. That means investing in areas like spreading connectivity, building artificial intelligence and developing virtual and augmented reality. I am committed to our mission and to leading Facebook there over the long term.

While helping to connect the world will always be the most important thing I do, there are more global challenges that I feel a responsibility to help solve — like helping to cure all diseases by the end of this century, upgrading our education system so it’s personalized for each student, and protecting our environment from climate change. That’s why Priscilla and I created the Chan Zuckerberg Initiative and committed to give 99 percent of our Facebook shares during our lives to advance human potential and promote equality.

Today, Facebook’s board of directors is announcing a proposal to create a new class of stock that will allow us to achieve both goals. I’ll be able to keep founder control of Facebook so we can continue to build for the long term, and Priscilla and I will be able to give our money to fund important work sooner. Right now, there are amazing scientists, educators and doctors around the world doing incredible work. We want to help them make a bigger difference today, not 30 or 40 years down the road.

LEAVE A REPLY