Facebook (FB) CEO Mark Zuckerberg cites Facebook’s dual-class stock structure as one way he retains control over his company. As a result, Zuckerberg retains majority voting power in decision-making despite not having a majority of shares.
Om Malik, who founded Gigaom, posted the question on Facebook: “How much do you think Twitter’s problems are driven by the fact that Wall Street (and other investors) judge a CEO differently from a strong founder? For a while Facebook strategy was questioned by short-term oriented investment community but it was the founder (aka) you who stayed the course.”
Zuckerberg replied to Malik: “The more power you have as a CEO, the easier it is for you to do what you think is right and ignore people pushing for shorter term interests.”
“Similarly, if you have control of the company — like I do at Facebook and an increasing number of founders do — then it is very difficult for investors to fire you,” added Zuckerberg. “This means you don’t need to worry about losing your job over a couple of bad quarters or controversial short term decisions, and that makes it easier for you to make the decisions you think are correct as well.”
He continued: “If you have to make short term tradeoffs because activist investors are pressuring your board for quick financial results and you might get fired otherwise, then the compromises you make will just make it harder and harder to deliver the results you want and execute your mission over time.”
The Q&A comes just after Facebook announced that it was adding an option for marketers to pay after a video runs for at least 10 seconds.
