Facebook logo is seen at a start-up companies gathering at Paris' Station F in Paris, France on January 17, 2017.Philippe Wojazer/Reuters
Mark Zuckerberg said Friday that Facebook is withdrawing plans to create a new class of stock that would have let him keep tight reins on the social media company even as he sold down his stake to fund his philanthropy.
Zuckerberg had said in April 2016 that the plan for the new shares would let him fund his philanthropy goals while keeping control of Facebook. But shareholders sued, arguing the move would give an unfair economic advantage to the company's founder.
A class-action trial on the matter was due to start next week in Delaware but was called off with Zuckerberg's announcement. He had been slated to testify during the trial.
The billionaire CEO said in a Facebook post that because the value of Facebook's stock has grown, he can fully fund the philanthropy while still keeping voting control of the company for "20 years or more," making the stock-reclassification plan unnecessary.
Zuckerberg and his wife, Priscilla Chan, have committed to donating 99 per cent of their wealth in their lifetimes. They plan to accelerate their philanthropic work and sell more Facebook shares, sooner, he said Friday.
A lawyer representing Facebook shareholders in a lawsuit against the company deemed it a win for clients.
"We're thrilled that Facebook has dropped the reclassification," attorney Stuart Grant said in a statement. "Today's move is a total victory for stockholders."