Even though the metaverse's growing multimillion-dollar gamble isn't panning out , and significant money losses are predicted over the next three to five years, Mark Zuckerberg's position as CEO of Meta isn't in jeopardy.
The way Zuckerberg has structured the tech company's leadership makes him one of the most powerful CEOs in corporate America.
Meta, the parent company of Facebook, has a dual class structure. This means that shareholders own one type of share, Class A, while Zuckerberg and a small circle of insiders have another type of Class B.
While Class A shareholders get just one vote, Class B shareholders get 10 votes per share, meaning Zuckerberg and other shareholders in his group are virtually untouchable.
In fact, Zuckerberg owns 90% of the company's Class B shares, which is enough for him to maintain full control of the company himself.
If we talk about the traditional scheme, all shareholders usually have the same voice in making decisions that affect the company. Under that context, each share receives only one vote, regardless of who owns it.
However, the model executed by Zuckerberg allows him to have absolute control of any decision that affects the company. In addition, he has structured the company in a way that makes it almost impossible for him to step down as CEO unless he wants to, says Business Insider.
A 2018 CFA Institute report said those in the dual structure often argue that control allows charismatic and visionary founders and entrepreneurs to execute on their vision without having to worry about stock performance.
Although Facebook shares initially performed well, investors have had no problem buying previous voting shares. However, with the current course of the metaverse, shareholders have had to stick to projected short- and medium-term money losses , without having much of a say on boards.
In addition to this, the situation in Meta is not the healthiest for its employees. Thousands of workers are expected to be laid off this week, according to The Wall Street Journal. It would be the biggest cut in the digital company's 18 years.