Facebook’s board was sued earlier this year, with investors alleging that their interests were not adequately represented when Zuckerberg was permitted to sell most of his shares and still retain voting control of the company. And now court filings uncovered by Bloomberg show that texts sent by board member Marc Andreessen are being used to suggest that he was protecting Zuckerberg instead of shareholders.
Private messages sent during conference calls from Andreessen to Zuckerberg, such as “this line of argument is not helping” and “now we’re cooking with gas,” have given some investors the impression that he was coaching the CEO instead of negotiating with him.
The board appointed a committee last year to represent investor concerns because the proposed stock sale could dilute their voting power. Andreessen was on the committee and has been accused of neglecting his fiduciary duties.
According to the legal complaint acquired by TechCrunch, “there was no attempt by the Special Committee to negotiate for a vote by the majority of the minority as would have been fair in this self-dealing transaction.” They express concern that separating voting control from an equity stake is “a circumstance which tends not only to reduce accountability of executives to a company, but to depress the stock price of a company.”
In a highly-publicized announcement last year, Zuckerberg revealed that he would be selling most of his shares to set up a fund dedicated to philanthropic endeavors. But the founder also worked out an agreement that he would still retain voting control of Facebook, even after reducing his ownership or a hypothetical departure from the company.
A related SEC filing raised speculation that he was thinking about running for public office. A clause said that “Mr. Zuckerberg’s leave of absence or resignation would not constitute a Voluntary Resignation if it were in connection with his serving in a government position or office.”
The outcome of the lawsuit could have significant implications about the role of public company boards and whether executives would be forced to give up voting power when they sell shares.
The court case is lengthy and we are currently reviewing more documents from the Delaware Chancery Court.
A spokesperson for Facebook tells TechCrunch that 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.”
A spokesperson for Andreessen Horowitz said “we are not commenting on pending litigation.”