Facebook is starting to think about a time when Mark Zuckerberg will no longer be its CEO. 
 
 The company is asking shareholders to vote on a proposal that allows Zuckerberg's majority voting control to be terminated if he steps down or no longer occupies a leadership position at Facebook. 
 
 "These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company," Facebook said in a proxy statement filed to the Securities and Exchange Commission. 
 
 The proposal stipulates that if Zuckerberg were to resign or be fired for cause, his Class B shares would convert into Class A, which would grant him just one vote per share instead of 10. The terms would also prevent the CEO's descendants from retaining control of the company through ownership of Class B stock. 
 
 Zuckerberg currently owns 419 million Class B shares and 4 million Class A shares, which gives him 53.8% of total shareholder voting power. But he also holds an irrevocable proxy over Class B shares owned by co-founder Dustin Moskovitz, which boosts his control to 60%. 
 
 Facebook (FB, Tech30) said it believes that finding a qualified CEO to replace Zuckerberg would be difficult if he retained Class B shares. 
 
 Another reason for the change, the company said, is to encourage Zuckerberg to stick around. The potential loss of Class B shares could help prevent him from leaving and joining a competitor. 
 
 Related: Sheryl Sandberg says that Peter Thiel will stay on Facebook's board 
 
 In April, Facebook proposed issuing a new class of stock -- Class C shares -- that would help Zuckerberg keep control of the company for years to come. If approved, current owners of Class A and Class B shares would each be granted two Class C shares -- which do not include voting rights. 
 
 The move should allow Zuckerberg, who has announced that he intends to give most of his Facebook stock to charity, to donate shares without diluting his voting power. 
 
 Corporate governance experts, however, warn that such structures -- popular in Silicon Valley -- may not be in the best interest of outside shareholders. 
 
 Facebook shareholders will vote on the proposals at the company's annual meeting on June 20. ||||| Stephen Shankland/CNET 
 
 Think Facebook, think Mark Zuckerberg. The two are inseparable. 
 
 Or are they? 
 
 Ever since his days as a precocious Harvard-student-turned-entrepreneur, Zuckerberg has been synonymous with Facebook in the minds of the social network's users, rivals and investors. 
 
 But what if the unthinkable should happen: What if Zuckerberg should leave the company? It's hard to imagine what a post-Zuckerberg Facebook would look like, but it's the job of the company's board members to plan for such major disruptions -- and planning for it they are. 
 
 The multibillionaire and company founder has shown no signs that he has any plans to drop the reins of his Internet empire -- in fact, he recently strengthened his control. That, however, hasn't stopped Facebook's board members from concocting a contingency plan. They have proposed wresting majority voting control of the company from Zuckerberg should he duck out of Facebook's management, according to a proxy filing to the US Securities and Exchange Commission on Thursday. 
 
 It might appear harsh, but this is no coup. Facebook's board members are caretakers of the company and need to plan for how they would handle any events that might throw the company off course. Part of that means ensuring any future CEO of Facebook wouldn't have limited management powers if an absent Zuckerberg were to keep a controlling stake in the business. 
 
 The proposed plan, if Zuckerberg leaves the company, is to convert his Class B shares, which in the case of Facebook have more voting power, into Class A shares, which have less voting power. That is, he would keep his 14.8 percent economic stake in the company, while seeing his 53.8 percent voting power reduced. 
 
 "These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company," said the board in the filing. It is set to vote on whether to reclassify Zuckerberg's stock at the next shareholder meeting on June 20. 
 
 In spite of all that, Zuckerberg's future at the company looks as strong as ever. The special committee appointed by Facebook's board to put together the proposal made it clear in the filing that keeping the founder on board for as long as possible is a priority when they were assembling the proposal. 
 
 "The Special Committee and our board of directors believe the reclassification is an appropriate way to make it more likely that Mr. Zuckerberg will remain in a leadership role, and thus in a position to influence our direction for many years, and we believe that this influence has been and will be beneficial to our growth, strategy, and stability," they said. 
 
 Facebook did not respond to a request for comment. ||||| Mark Zuckerberg has gotten so rich that he can fund his philanthropic foundation and retain voting control without Facebook having to issue a proposed non-voting class of stock that faced shareholder resistance. Today Facebook announced that it’s withdrawn its plan to issue Class C no-vote stock and has resolved the shareholder lawsuit seeking to block the corporate governance overhaul. 
 
 Instead, Zuckerberg says that because Facebook has become so valuable, he can sell a smaller allotment of his stake in the company to deliver plenty of capital to his Chan Zuckerberg Initiative foundation that aims to help eradicate disease and deliver personalized education to all children. 
 
 “Over the past year and a half, Facebook’s business has performed well and the value of our stock has grown to the point that I can fully fund our philanthropy and retain voting control of Facebook for 20 years or more,” Zuckerberg writes. Facebook’s share price has increased roughly 45 percent, from $117 to $170, since the Class C stock plan was announced, with Facebook now valued at $495 billion. 
 
 “We are gratified that Facebook and Mr. Zuckerberg have agreed not to proceed with the reclassification we were challenging,” writes Lee Rudy, the partner at Kessler Topaz Meltzer & Check LLP that was representing the plaintiffs in the lawsuit seeking to block the no-vote share creation. Zuckerberg was slated to testify in the suit later this month, but now won’t have to. “This result is a full victory for Facebook’s stockholders, and achieved everything we could have hoped to obtain by winning a permanent injunction at trial.” 
 
 “I want to be clear: this doesn’t change Priscilla and my plans to give away 99% of our Facebook shares during our lives. In fact, we now plan to accelerate our work and sell more of those shares sooner,” Zuckerberg wrote. “I anticipate selling 35-75 million Facebook shares in the next 18 months to fund our work in education, science, and advocacy.” That equates to $5.95 billion to $12.75 billion worth of Facebook shares Zuckerberg will liquidate. 
 
 When Zuckerberg announced the plan in April 2016, he wrote that being a founder-led company where he controls enough votes to always steer Facebook’s direction rather than cowing to public shareholders lets Facebook “resist the short term pressures that often hurt companies.” By issuing the non-voting shares, “I’ll be able to keep founder control of Facebook so we can continue to build for the long term, and Priscilla and I will be able to give our money to fund important work sooner.” 
 
 A spokesperson for the Chan Zuckerberg Initiative told TechCrunch that this outcome is very good for the foundation, because it provides more predictability to its funding. The plan will also allow Zuckerberg to deliver cash to the CZI sooner, which its new CFO Peggy Alford will be able to allocate between its health, education and advocacy projects. 
 
 With the new plan to sell shares, it’s unclear what might happen to Zuckerberg’s iron grip on Facebook’s future in “20 years or more.” 
 
 Dropping the Class C shares plan may be seen as a blow to Facebook board member Marc Andreessen, who Bloomberg revealed had coached Zuckerberg through pushing the proposed plan through the rest of the board. But given Zuckerberg’s power, Andreessen is unlikely to be ousted unless the Facebook CEO wants him gone. 
 
 For the foreseeable future, though, Zuckerberg will have the power to shape Facebook’s decisions. His business instincts have proven wise over the years. Acquisitions he orchestrated that seemed pricey at first — like Instagram and WhatsApp — have been validated as their apps grow to multiples of their pre-buy size. And Zuckerberg’s relentless prioritization of the user experience over that of advertisers and outside developers has kept the Facebook community deeply engaged instead of pushed away with spam. 
 
 Zuckerberg’s ability to maintain power could allow him to continue to make bold or counter-intuitive decisions without shareholder interference. But the concentration of power also puts Facebook in a precarious position if Zuckerberg were to be tarnished by scandal or suddenly unable to continue his duties as CEO. 
 
 Zuckerberg warned investors when Facebook went public that “Facebook was not originally created to be a company. It was built to accomplish a social mission.” And yet Facebook has flourished into one of the world’s most successful businesses in part because shareholders weren’t allowed to sell its ambitions short. ||||| Chip Somodevilla/Getty Images; Samantha Lee/Business Insider 
 
 Ten months before Facebook's next shareholder meeting, an investor has drawn up a new proposal to oust Mark Zuckerberg as chairman of the social-networking giant. 
 
 The proposal, which reflects the strong feeling among Facebook investors that governance changes are essential, was written by Trillium Asset Management, which manages about $11 million (£8.4 million) in Facebook stock. 
 
 It was filed before Facebook released a brutal second-quarter earnings update on Wednesday, which sent the firm's share price tumbling by nearly 24%, wiping as much as $148 billion off its value. 
 
 Trillium's proposal, if approved by investors including Facebook's management, would require the company to appoint an independent chairman, breaking up Zuckerberg's dual role as CEO and chairman. 
 
 "A CEO who also serves as chair can exert excessive influence on the board and its agenda, weakening the board's oversight of management," the proposal says. 
 
 "Separating the chair and CEO positions reduces this conflict, and an independent chair provides the clearest separation of power between the CEO and the rest of the board." 
 
 Trillium is far from alone. Business Insider spoke with five other shareholders last month who control $3 billion of Facebook stock. They also want an independent chairman, like there is at Apple, Google, Oracle, Twitter, and Microsoft. 
 
 What the proposal describes as Facebook's "mishandling" of scandals is cited as the reason the change is necessary. Crises mentioned include meddling in the 2016 US election, the Cambridge Analytica data scandal, and the recent situation in Myanmar, where Facebook users were accused of inciting violence. 
 
 Trillium hopes the proposal will attract the support of other shareholders. A similar proposal to oust Zuckerberg as chairman was put forward last year and rejected, despite 51% of independent investors voting in favor of the change. 
 
 This is a symptom of Facebook's dual-class share structure. Class B shares have 10 times the voting power of class A shares, and it just so happens that Zuckerberg owns more than 75% of class B stock. 
 
 It means he has more than half of the voting power at Facebook and therefore the ability to swat away investor proposals. This makes the chances of Trillium's proposal becoming reality extremely slim. 
 
 Facebook declined to comment. The company has previously said splitting Zuckerberg's role in two would create "uncertainty, confusion, and inefficiency in board and management function." 
 
 A Facebook protester on Capitol Hill. AP 
 
 But activist investors will be emboldened by Facebook's disastrous second-quarter earnings. Revenue and user growth missed Wall Street's expectations, which could indicate that the sequence of scandals in recent years is catching up with the company. 
 
 Trillium's early proposal shows how serious shareholders are about change, according to Michael Connor, the director of Open Mic, an organization that helps shareholders campaign to improve governance at some of America's biggest companies. 
 
 "Most corporate governance experts maintain that having an independent chair is simply a very good idea. Filing the proposal early gives Zuckerberg and the company — as well as shareholders — plenty of time to contemplate the issue," he said. "Agreeing to the proposal would be a very big step for Zuckerberg and other members of Facebook's board, so it's a great idea to give them time to think through." 
 
 Here's Trillium Asset Management's proposal in full: 
 
 Resolved: Shareholders request the Board of Directors adopt as policy, and amend the bylaws as necessary, to require henceforth that the Chair of the Board of Directors, whenever possible, be an independent member of the Board. This independence policy shall apply prospectively so as not to violate any contractual obligations. If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chair. 
 
 Supporting Statement: 
 
 Facebook CEO Mark Zuckerberg has been Board Chair since 2012. His dual-class shareholdings give him approximately 60% of Facebook's voting shares, leaving the board, even with a lead independent director, with only a limited ability to check Mr. Zuckerberg's power. We believe this weakens Facebook's governance and oversight of management. Selecting an independent Chair would free the CEO to focus on managing the Company and enable the Chairperson to focus on oversight and strategic guidance. 
 
 The Council of Institutional Investors argues: 
 
 Having an independent chair helps the board carry out its primary duty - to monitor the management of the company on behalf of its shareowners. A CEO who also serves as chair can exert excessive influence on the board and its agenda, weakening the board's oversight of management. Separating the chair and CEO positions reduces this conflict, and an independent chair provides the clearest separation of power between the CEO and the rest of the board. 
 
 Facebook has resisted recent shareholder requests to separate these roles. In 2017, according to our calculations, a similar proposal received the support of 51% of the votes cast when excluding the shares of 13 executives and board members. However, the board has not acted on this important signal from its non-insider shareholders. 
 
 Google, Microsoft, Apple, Oracle, and Twitter have separate CEO and chairperson roles. More broadly, 59% of the S&P; 1500 separated these roles as of April 2018. 
 
 We believe this lack of independent board Chair and oversight has contributed to Facebook missing, or mishandling, a number of severe controversies, increasing risk exposure and costs to shareholders. Examples from past years include: 
 
 Russian meddling in U.S. elections 
 
 Sharing personal data of 87 million users with Cambridge Analytica 
 
 Data sharing with device manufacturers, including Huawei that is flagged by U.S. Intelligence as a national security threat 
 
 Proliferating fake news 
 
 Propagating violence in Myanmar, India, and South Sudan 
 
 Depression and other mental health issues, including stress and addiction 
 
 Allowing advertisers to exclude black, Hispanic, and other "ethnic affinities" from seeing ads. 
 
 In apologies, Mr. Zuckerberg has stated, "We didn't take a broad enough view of our responsibility." This broader view is what an independent Board Chair would provide, which we believe would benefit the company, its shareholders, and its global community of users. 
 
 See also:
– It's hard to imagine Facebook without the face of Mark Zuckerberg at its helm, but that's exactly what the site's board of directors is anticipating in its latest proposal to the SEC. Per Reuters, the board submitted a proxy filing Thursday, notifying the federal agency that it intends to call for a shareholder vote on converting the CEO's current Class B shares (about 419 million of them) into Class A shares (4 million), so that if and when he bade a Facebook farewell from any executive position, he won't retain majority voting control. All of his shares together equal about 54% of the company's voting power, but he also holds proxy over shares owned by co-founder Dustin Moskovitz, effectively giving him 60% control, reports CNNMoney. "These new terms thus ensure that we will not remain a founder-controlled company after we cease to be a founder-led company," the filing says. Investopedia explains: Although Class A shares are often thought to hold more voting power, this isn't always true, and in Facebook's case, the latter appears to be what's going on. If Zuckerberg were to resign or be fired for cause, his Class B shares would morph into Class A versions, which would allot him just one vote (instead of 10) per share, CNN notes. What would remain unaffected if his shares are converted is Zuckerberg's economic stake in the company—currently 14.8%, per CNET. Facebook's reasoning for loosening Zuckerberg's grip: The company says the power he holds may scare away interested CEO candidates. It also hopes to convince him to remain with Facebook for the long haul and not jump to a competitor. The vote will reportedly take place on June 20. (Facebook has a big project in the works with Microsoft.)