Facebook's Mark Zuckerberg drops controversial stock plan

Facebook CEO Mark Zuckerberg wants to retain control of the company but sell his shares

Facebook chief executive Mark Zuckerberg has abandoned plans to create a new class of company stock.

A group of investors had sued over the proposal, which would have allowed Mr Zuckerberg to retain voting control of Facebook but own a smaller share of the company's shares.

Mr Zuckerberg still plans to sell up to $12bn (£9bn) of Facebook shares to fund philanthropic ventures.

He would potentially have appeared in court next week as part of the lawsuit.

Mr Zuckerberg wrote on Facebook that when he proposed the stock split, he viewed it as the "only way" to fund those ventures, while maintaining control of Facebook.

But he said the share price had increased so much that he no longer saw it as necessary.

The proposed structure is popular with founders of firms such as Google's parent company Alphabet, but other shareholders view it as unfair.

Facebook listed its shares on the New York Stock Exchange in May 2012

"Over the past year and a half, Facebook's business has performed well and the value of our stock has grown to the point that I can fully fund our philanthropy and retain voting control of Facebook for 20 years or more," Mr Zuckerberg wrote.

"As a result, I've asked our board to withdraw the proposal to reclassify our stock - and the board has agreed."

Mr Zuckerberg said he plans to sell 35 million to 75 million shares - worth up to $12bn at current prices - over the next 18 months to fund his family's philanthropic work.

'Total victory'

Investors, including pension funds, had alleged that Facebook's board breached its duty to represent shareholders when they approved the plan.

Stuart Grant of Grant & Eisenhofer, an attorney for shareholders, called the decision a "total victory". He said the case was now expected to be dismissed.

"We're thrilled that Facebook has dropped the reclassification," Mr Grant said.

Facebook has been grappling with controversy stemming from fake news spread through its network, as well as calls for increased regulator action.