Mark Zuckerberg's tight control over Facebook is under assault from shareholders even before his social networking giant joins the public market.
One of the largest pension funds in the United States has promised to take on the company over weak corporate governance structures and the highly unusual decision-making power handed to its 27-year-old founder.
The California State Teachers' Retirement System, Calstrs, says it will raise its concerns in a letter to Facebook and try to get it to change its policies before a stock-market flotation planned for this spring.
Facebook said last week that it would sell around US$5 billion ($6 billion) shares to the public, an offering that could value the company at US$75 billion to US$100 billion.
In a prospectus for the offering, Zuckerberg's dominance became clear for the first time. He owns about 28 per cent of Facebook and some of his early backers, including DST Global and Accel Partners, have given him irrevocable voting rights over their stakes. The shares on offer will have only one-tenth the voting power of founders'.
Zuckerberg has the sole right to appoint his successor, and if founders' shares dwindle as a proportion of the company, further restrictions will kick in limiting the power of other shareholders to nominate board members.
Calstrs, which manages US$145 billion, said "There should be some more respect for capital".