In the summer of 2005, Facebook’s first president, Sean Parker, was pushed out of Facebook after a drug-related arrest.
In losing the gig, Sean also lost a seat on Facebook’s board.
What he would do next could have lasting impacts on American business for the next century.
Sean is not a fan of VCs after a coterie of them pushed him out Plaxo, a company he’d founded prior to Facebook. So he insisted that his seat go not to one of Facebook’s investors, but that it fall under control of the company’s CEO and cofounder, Mark Zuckerberg. It gave Mark control over three seats on a five-person board.
In David Kirkpatrick’s upcoming book, The Facebook Effect, Sean says this move effectively made Mark “the hereditary king of Facebook.”
Since Parker’s outser, Mark has taken two more steps to shore up power.
First, he plowed through COOs and advisors – Eduardo Saverin, Doug Hirsch, Owen Van Natta, Matt Cohler, among them – until finding one, Sheryl Sandberg, who swears she has no ambition to be Facebook CEO some day.
Second, in November 2009, Mark re-jiggered Facebook’s shareholder structure into one that mirrors The Washington Post Company’s and Google’s. After Facebook IPOs, Mark and his allies will control stock that grants them 10 votes each. Everybody else will get one vote per share.
“I refer to Facebook as a family business,” says Sean, still a huge shareholder.
“Mark and his heirs will control Facebook in perpetuity.”
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