It's hard to imagine Facebook without the face of Mark Zuckerberg at its helm, but that's exactly what the site's board of directors is anticipating in its latest proposal to the SEC. Per Reuters, the board submitted a proxy filing Thursday, notifying the federal agency that it intends to call for a shareholder vote on converting the CEO's current Class B shares (about 419 million of them) into Class A shares (4 million), so that if and when he bade a Facebook farewell from any executive position, he won't retain majority voting control. All of his shares together equal about 54% of the company's voting power, but he also holds proxy over shares owned by co-founder Dustin Moskovitz, effectively giving him 60% control, reports CNNMoney. "These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company," the filing says.
Investopedia explains: Although Class A shares are often thought to hold more voting power, this isn't always true, and in Facebook's case, the latter appears to be what's going on. If Zuckerberg were to resign or be fired for cause, his Class B shares would morph into Class A versions, which would allot him just one vote (instead of 10) per share, CNN notes. What would remain unaffected if his shares are converted is Zuckerberg's economic stake in the company—currently 14.8%, per CNET. Facebook's reasoning for loosening Zuckerberg's grip: The company says the power he holds may scare away interested CEO candidates. It also hopes to convince him to remain with Facebook for the long haul and not jump to a competitor. The vote will reportedly take place on June 20. (Facebook has a big project in the works with Microsoft.)