Facebook today, as part of its earnings release, said it would add a new class of non-voting stock for the company, which will keep Mark Zuckerberg in control of the company.
“This proposal is designed to create a capital structure that will, among other things, allow us to remain focused on Mr. Zuckerberg’s long-term vision for our company and encourage Mr. Zuckerberg to remain in an active leadership role at Facebook,” the company said as part of the release.
With the restructuring, people who are buying into Facebook with what’s called “Class C” stock will not have any voting rights. That gives Zuckerberg, who has control of the company, increased protection against agitation from investors and more room to focus on Facebook’s core strategy. Wall Street often focuses on near-term earnings results, and this gives Zuckerberg the ability to focus on more long-term goals that he has. It also means that Zuckerberg can make drastic moves — like buying WhatsApp for $19 billion or betting on virtual reality (which won’t have any material impact on 2016) — without much in his way.
Of course, that strategy has been working so far — the company showed a significant earnings beat today and its stock is up more than 8 percent. But if Facebook were to ever turn south, this would ensure Zuckerberg is in control of the company’s strategy moving forward.
This isn’t unfamiliar territory. Google (now Alphabet) has also issued a dual-class structure that includes non-voting stock, further helping Sergey Brin and Larry Page maintain control of the company.
A move like this gives Facebook a way to pay for acquisitions through stock, and also pay employees, without diluting Zuckerberg’s control of the company. It also means, as Class B shares liquidate over time, Zuckerberg gets more and more control of the company.
Here’s Zuckerberg’s rationale for the change in structure:
 
