SAN FRANCISCO — Mark Zuckerberg nurtured Facebook from a dorm room idea into the world’s biggest social network. Now the company is taking steps to ensure its founder remains in charge.
Facebook on Wednesday proposed a new class of stock, known as C shares, in a move meant to allow Mr. Zuckerberg to maintain control of the Silicon Valley company. The creation of the new class of shares allows the chief executive to preserve his voting power at Facebook, even as he begins an effort to give away the majority of his stock for charitable purposes.
Facebook said the move was “not a traditional governance model,” but it added that “Facebook was not built to be a traditional company.”
The proposal speaks to a very Silicon Valley ethos where company founders often reign supreme — and where corporate structures have shifted to accommodate that philosophy. Over the past decade, more tech companies have adopted two classes of stock so that their founders can cement their voting power at the firms. In 2012, Google announced that it was creating a third class of shares to prevent its founders’ voting power from diminishing.
Mr. Zuckerberg on Wednesday cited the Silicon Valley mantra of founders in explaining the new class of stock, calling Facebook a “founder-led company.” In a conference call, he added, “Facebook has been built on a series of bold moves. When I look out on the future, I see more bold moves ahead of us, not behind us.”
The social network on Wednesday also reported robust first-quarter earnings that show the results of Mr. Zuckerberg’s leadership. Facebook said sales rose 52 percent to $5.3 billion from a year ago, while profit increased to $1.5 billion, tripling from $512 million a year earlier. Excluding certain items, profit was 77 cents a share, far surpassing Wall Street expectations of 62 cents a share.
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