Facebook’s slumping stock price could have an unexpected casualty: CEO Mark Zuckerberg’s philanthropy efforts.
How Facebook’s slumping stock price could hurt Mark Zuckerberg’s philanthropy plans
Eventually, Zuckerberg will have to choose between controlling Facebook and funding his philanthropic efforts.
Zuckerberg has pledged to give away or spend 99 percent of his Facebook stock over his lifetime to fund issues that are important to him, like education reform and curing disease. So far, he’s sold more than $5.6 billion in stock, according to Bloomberg.
But after nine months of aggressive selling, Zuckerberg didn’t sell any shares in Q4, Bloomberg reported Thursday. The likely culprit: Facebook’s struggling stock price, which is down more than 37 percent since its high in July thanks to a myriad of controversies and concerns over the company’s user growth.
It’s understandable that Zuckerberg didn’t sell shares last quarter — no one wants to sell when the price is near a two-year low — but it’s also a good reminder that Facebook’s stock price can have some serious impact on Zuckerberg’s philanthropy.
The obvious reason: If Zuckerberg’s stock is worth less, he won’t have as much to spend on the causes he cares about. In July, Zuckerberg’s net worth was $86.5 billion. Now, it’s $53.8 billion. His net worth will change a lot over the next 50-plus years, but you can see how dramatically his philanthropic efforts will be tied to Facebook’s success.
The less obvious but arguably more important reason: Selling Facebook stock will eventually hurt Zuckerberg’s ability to control Facebook, and if Zuckerberg’s stock is worth less, he’ll have to give up control sooner because he’ll need to sell more shares to get the money needed to fund his plans.
Or he’ll have to postpone those plans.
The reality is that Zuckerberg can’t give away shares without also giving away voting control. At some point down the line, he’ll need to decide which is more important to him.
Don’t expect that to happen anytime soon. Zuckerberg has made just one giving commitment with any timeline on it: He said in September 2017 that he would give away 35 million to 75 million shares of stock “in the next 18 months,” an amount that shouldn’t erode the 59.9 percent voting control he had back in March. He’s nearly reached that 35 million share threshold, according to Bloomberg.
The only other commitment he’s made is to give away his shares during his lifetime. He’s 34 years old, which means Zuckerberg can sit back and wait for Facebook’s stock price to improve before he sells any more shares. How long that will be, though, is another question.
This article originally appeared on Recode.net.
