ApprovedBusinessBusiness and finance

Facebook and the meaning of share ownership

ONE group of Facebook friends that Mark Zuckerberg recently decided were not worth hanging out with were its public shareholders, who expected to cross-examine him (via a lawyer) on September 26th in a Delaware court. At issue would have been Mr Zuckerberg’s plans to refashion the social-media firm’s share-ownership structure more in his favour.

There is not a scintilla of doubt over who controls Facebook. Not only does Mr Zuckerberg, its founder, serve as its CEO and chairman; owning 16% of its shares, he controls 60% of the voting authority through a special class of stock with ten times normal voting rights. A year ago, Mr Zuckerberg decided he would like to sell a large slug of his holdings (worth $74bn) without diluting control. The firm made a plan to distribute non-voting shares enabling him to reduce his economic interest to 3% without affecting control.

That prompted litigation. Shareholder votes can be directly meaningful on many issues, including management pay…Continue reading

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ApprovedBusinessBusiness and finance

Rivigo is helping the Indian truck-driving industry out of a jam

Time to freshen up the model

THERE are 36 gradations in India’s archaic caste system, from the priestly to the supposedly untouchable. And then, somewhere below that, are the long-haul truck-drivers. Plying the subcontinent’s potholed highways for weeks at a time, few can settle into anything like a home life. Their marriage prospects are grim; venereal diseases and sore backs from sleeping in cramped cabs are but two occupational hazards. Despite an oversupplied national job market, the industry has struggled to attract the roughly 1m new drivers it needs each year to keep everything from Amazon packages to car parts moving. Can technology help?

To fend off shortages, most truck owners have done precisely what economists suggest, which is to increase pay. Drivers can now command nearly 40,000 rupees ($610) a month, a decent white-collar wage—and not far from double the level of trucker pay just three years ago. Rivigo, a startup based in Gurgaon, an…Continue reading

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ApprovedBusinessBusiness and finance

A shareholder pact is rocked by Liliane Bettencourt’s death

A face of the firm

DEATH does not end all uncertainties. News that Liliane Bettencourt, a glamorous 94-year-old Parisian heiress, died on September 20th has provoked a flurry of investor speculation over L’Oréal, the world’s biggest cosmetics company. She had held a controlling stake in the firm her father, an inventor of hair dyes, founded in 1909. Its market value has since grown to be a whisker short of €100bn ($117bn).

Her death brings few immediate consequences. An Alzheimer’s sufferer, she had been declared legally unfit to manage her concerns. That followed a scandal, made public in 2010 after her butler secretly recorded politicians, lawyers and friends as they bilked her for millions of euros. The case still haunts Nicolas Sarkozy, an ex-president. He seethed in October that opponents had stymied his return to politics by repeating allegations he profited from the “sordid Bettencourt affair” (he was cleared of charges over it in…Continue reading

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ApprovedBusiness and financeFINANCEFinance and economics

Venture capitalists with daughters are more successful

RICHARD NESBITT, a former chief operating officer at the Canadian Imperial Bank of Commerce, has long been an evangelist for women in business. In “Results at the Top”, a book he wrote with Barbara Annis, he describes his efforts to convince men to promote women. When speaking to bosses, he stresses data showing that companies with more senior women are more successful. But he has noticed that men with daughters tend to be more receptive to his message. At least for venture-capital (VC) firms, recent research confirms this observation, as well as the assertion that gender diversity boosts performance.

Paul Gompers and Sophie Wang at Harvard University wanted to determine whether VC firms with more women managers do better. Answering this question is tricky—firms that hire more women may have other characteristics that lead to success. VC-investing remains a predominantly male activity. In the authors’ sample of 988 VC funds in 301 firms, around 8% of new hires were women. Very few firms…Continue reading

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