Facebook CEO Mark Zuckerberg will testify on the witness stand later this month, a rare and high-profile courtroom appearance as his company defends a controversial plan to give shareholders non-voting stock.
Zuckerberg is scheduled to publicly testify in Delaware Chancery court on September 26, 2017, officially kicking off a trial that is also expected to include testimonies by Facebook board members Marc Andreessen, Erskine Bowles, Susan Desmond-Hellmann, and Peter Thiel.
The testimony would mark only the second time that the 33-year old Facebook cofounder, ranked the world’s 5th richest person by Forbes, testifies in public court.
Originally filed in April 2016, the class action lawsuit seeks to block Zuckerberg’s plan to reclassify Facebook’s stock structure and create a new class of non-voting shares. The proposed issuing of non-voting, Class-C shares would concentrate Zuckerberg’s majority voting rights even as he sells his holdings over time to fund his philanthropic efforts.
So far, the lawsuit’s discovery process has surfaced controversial text messages between Zuckerberg and Facebook board member Marc Andreessen, who the plaintiffs have accused of surreptitiously coaching Zuckerberg through a negotiation process with a special committee to win board approval for the stock change.
Another revelation from the discovery process was that Zuckerberg has seriously considered holding some form of public office. Facebook’s reclassification proposal included a clause that would let Zuckerberg serve indefinitely in public office while still maintaining control of the company.
The lead lawyer representing shareholders in the lawsuit, Stuart Grant, told Business Insider in an interview Friday that Zuckerberg’s proposal does a disservice to investors by devaluing their shares and divorcing the CEO’s economic interests from his majority voting rights.
“So many other interests”
In 2015, Zuckerberg created a philanthropic fund called the Chan Zuckerberg Initiative with his wife Priscilla Chan as a vehicle to give away his roughly $US70 billion fortune, the vast majority of which is made up of Facebook stock. The Facebook founder then started a campaign-like tour of the US in 2017 as a way to “get out and talk to more people about how they’re living, working and thinking about the future.”
Zuckerberg’s increased philanthropic efforts and apparent interest in public service are reasons to question whether he should maintain voting control of Facebook even as he sells his holdings, according to Grant.
“The question is how long is he going to be the full-time CEO of Facebook?” he said. “He’s got so many other interests, will he pursue those?”
Facebook’s proposed stock reclassification is pending the outcome of the lawsuit.
When asked for comment on the trial Friday, a Facebook spokesperson said the company 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.”
Zuckerberg’s first time on the witness stand was earlier this year for the lawsuit brought by game maker ZeniMax accusing Facebook’s Oculus VR subsidiary of using stolen technology. Facebook was ordered to pay $US500 million in damages in that suit, and is currently appealing the decision.
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