Facebook CEO Mark Zuckerberg has considered plans to go into government, according to court documents seen by Bloomberg.
The documents were filed as part of a shareholder lawsuit accusing Facebook’s board of failing to represent the best interests of those holding Facebook’s common stock.
The lawsuit focuses on a change to Facebook’s stock structure earlier this year. Zuckerberg holds a majority share of voting Facebook stock, giving him control of the company. But he wanted to be able to sell this off to fund his new philanthropy efforts — the Chan Zuckerberg Initiative — without losing this control. (The Financial Times reports that the plaintiffs are accusing Zuckerberg of a “self-interested agglomeration of power.”)
So Zuckerberg proposed creating a new class of shares for himself that would let that happen, and three board members were placed on a special committee to represent shareholders in the discussions. They were tasked with deciding whether Zuckerberg’s request to sell stock but maintain control was fair to other shareholders. The committee eventually agreed to Zuckerberg’s plan. The suit alleges that the plan diluted other shareholders’ votes over the stock.
A Facebook representative declined to comment to Business Insider. A company rep told Bloomberg, “Facebook is confident that the special committee engaged in a thorough and fair process to negotiate a proposal in the best interests of Facebook and its shareholders.”
One of the board members on the committee was Marc Andreessen, the Netscape cofounder turned Silicon Valley investor who runs the venture-capital fund Andreessen Horowitz.
Andreessen is specifically accused of a conflict of interest, with court documents reviewed by Bloomberg saying he communicated with Zuckerberg repeatedly while serving on the committee that was supposed to be making an independent decision about the stock.
Some of the texts sent between Andreessen and Zuckerberg have been made public in court documents — providing unusual insight into the inner workings of the social network’s leadership.
One of Zuckerberg’s motivations was apparently that he wanted to be able work in government while still retaining control of Facebook.
The documents reportedly say Erskine Bowles, one of Facebook board members on the special committee, was “worried that one of the concessions Zuckerberg wanted — to allow the billionaire to serve two years in government without losing control of Facebook — would look particularly irresponsible.” (Bowles is a former White House chief of staff.)
According to copies of the texts seen by The Guardian, Andreessen texted Zuckerberg in March that the “biggest issue” was “how to define the gov’t service thing without freaking out shareholders that you are losing commitment.”
“I think the biggest remaining issue is still around the government service,” Andreessen texted later.
“Erskine is just massively uncomfortable with you getting to low economic ownership and then going off on leave with no involvement by the board and retaining control,” he said.
“We rediscuss it on every call … I’m going to try to drag it over the line one more time. ☺ ”
“He’s worried that it’s the straw that breaks the camel’s back on the optics of good governance.”
“He’s worried it’s the thing people will point to on announcement and say ‘what the fuck are you guys doing agreeing to this’ Particularly since he thinks gov’t service would require you to give up control of FB anyway and it’s a moot point.”
“My counter argument is that because it’s likely a moot point let’s just give on it and it will probably never matter.”
Beyond that, the case is light on details as to what Zuckerberg’s purported government ambitions entail — whether he had an elected role or an appointed one in mind, for example, or whether there was a possible area of focus.
Another of Zuckerberg’s board members, Paypal cofounder Peter Thiel, also has a new appetite for public service. Thiel was one of the few Silicon Valley leaders to back President-elect Donald Trump in the run-up to the election, and he has now scored a position on Trump’s transition team.