The meltdown of WeWork’s CEO and Mark Zuckerberg’s bizarre threat to sue the U.S. offer a teachable moment: When you concentrate vast and unaccountable control over major companies in founders — no matter how creative or capable — bad things happen.
In Silicon Valley, the problem starts with “supervoting” stock structures that let the CEO (mostly) boy wonders raise mountains of cash from star-struck investors without giving up meaningful control over the company. The trick is a gimmicky “dual-share” stock structure in which the insiders’ own shares have powerful voting rights but ordinary investors are stuck on the sidelines. SEC Commissioner Robert Jackson has warned this dual class in effect creates “corporate royalty.”George Orwell would probably say it’s just another example of the “Some Animals Are More Equal Than Others” corruption that eventually poisons pretty much every revolution.
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