Zuck Does What Zuck Wants

As most of you know, Facebook acquired Instagram last week for about… (cue Dr. Evil) one BILLION dollars. But an article in the Wall Street Journal illustrates how the board’s input on CEO Mark Zuckerberg’s decision was virtually nil. Notwithstanding the fact that he holds majority voting rights and can technically do what he wants, it’s still a pretty bad-a** move, in this blogger’s opinion. WSJ reports:

On the morning of Sunday, April 8, Facebook Inc.’s youthful chief executive, Mark Zuckerberg, alerted his board of directors that he intended to buy Instagram, the hot photo-sharing service.

It was the first the board heard of what, later that day, would become Facebook’s largest acquisition ever, according to several people familiar with the matter. Mr. Zuckerberg and his counterpart at Instagram, Kevin Systrom, had already been talking over the deal for three days, these people said.

Negotiating mostly on his own, Mr. Zuckerberg had fielded Mr. Systrom’s opening number, $2 billion, and whittled it down over several meetings at Mr. Zuckerberg’s $7 million five-bedroom home in Palo Alto. Later that Sunday, the two 20-somethings would agree on a sale valued at $1 billion.

It was a remarkably speedy three-day path to a deal for Facebook—a young company taking pains to portray itself as blue-chip ahead of its initial public offering of stock in a few weeks that could value it at up to $100 billion. Companies generally prefer to bring in ranks of lawyers and bankers to scrutinize a deal before proceeding, a process that can eat up days or weeks.

Mr. Zuckerberg ditched all that. By the time Facebook’s board was brought in, the deal was all but done. The board, according to one person familiar with the matter, "Was told, not consulted."

Mr. Zuckerberg owns 28% of Facebook’s stock, and controls 57% of its voting rights, giving him the freedom to act independently if he wants. Mr. Systrom, similarly, owns about 45% of his company. That control means investors must accept the fact that the CEOs can move quickly. 

Indy Star Blasts Washington Township Board

We brought you this gem last week. Now, the Indy Star is weighing in with some strong words against the Washington Township board that voted to give itself a 60% pay increase. The Star rightfully also points out that this is just a microcosm of the entire township government problem:

Over protests from residents and with little discussion, the Washington Township Board last week handed itself a 60 percent pay raise, effectively reversing a pay cut the board accepted last year after the township fire department was merged with the city’s.

… Eliminating township government altogether is a prominent recommendation of the Indiana Commission on Local Government Reform, whose report last year has been driving high-level discussions about municipal efficiency. One major result already is the folding of township assessors into one countywide office. A new state law accomplished that for smaller counties; and Marion County, for one, approved a referendum this month abolishing the job of township assessor.

Can township government itself, and township boards, be next? Gov. Mitch Daniels, among others, hopes so, arguing convincingly that multiple redundant layers of local government waste money and impede service. As property assessing joins police and fire protection among countywide functions, the dispensability of outmoded township governance will become more obvious.

Defenders of that 19th-century vestige maintain that it keeps public servants closer to the public. Whether that’s worth higher cost and lower efficiency is debatable in any case. In the case of the Washington Township Board, close turns out to be more like in-your-face.

Again, if the board wanted to make a case about job duties changing and whatnot as justification for a raise, I’m sure most of us would be willing to listen. Probably still wouldn’t support it, but we’d listen. Yet the unwillingness to even listen to public input or discuss the matter with the media, as displayed by reporter Norman Cox’s original blog (linked in our first post), is the most alarming aspect of this. The government is not God; it should work for us.