Comment by saghm
I'm confused by this; isn't the board of directors who picks the CEO? Or are they locked in for some period of time and don't want to wait around?
I'm confused by this; isn't the board of directors who picks the CEO? Or are they locked in for some period of time and don't want to wait around?
> EDIT: But that brings up a different question: If you have majority voting power, why try to take the company private (as it has been suggested by others here)?
1. Less legal oversight and paperwork.
2. I don’t know the terms of the buyout, but if this means the CEO, family, friends, etc (“insiders”) become the new shareholders, then any future upside will be distributed to insiders not the open market.
You can have company control without having even a majority.
This is similar to what zuckerberg is doing with Meta. Supervoting Class A shares vs common shares, etc.
The arrangement is completely up to the governing docs of the entity.
The CEO does currently control the company without a majority.
Having less legal oversight generally refers to paperwork that needs to be done for the SEC.
> If you have majority voting power, why try to take the company private (as it has been suggested by others here)?
I don't know their governance structure, but the CEO may have a majority of votes, but not own a majority of the actual shares. Being able to take the company private would give her (and her other investors) full economic control as well as voting control.
This is risky ground, of course. Even with voting control, legally the CEO cannot screw over the minority shareholders.
>But that brings up a different question: If you have majority voting power, why try to take the company private (as it has been suggested by others here)?
voting power dictates control. Ownership dictates rights to profits. you can have full control with 51% ownership, but you still only get 51% of profits.
The CEO owns 49% of the voting power so the board is pretty much toothless. Facing a direct conflict with her, loudly resigning is probably about the best they could do.
I don't know the first thing wrt how 23andMe has its governance and voting setup, but the letter seems to imply the CEO has majority power or, at least, a large enough plurality that it is a one-person-show:
> Because of that difference and because of your concentrated voting power, we believe that it is in the best interests of the Company’s shareholders that we resign
EDIT: But that brings up a different question: If you have majority voting power, why try to take the company private (as it has been suggested by others here)?