Jensen Huang built Nvidia into a $4 trillion AI giant but owned less than 4% of it, leaving him without the super-voting power to protect his CEO role
Why Jensen Huang’s stock ownership didn’t protect his CEO position Despite being the company’s largest individual shareholder, Huang did not have unparalleled voting control over his company or outsized control over the company’s board, like other founders.
Key points
- Since the scandal involving an alleged Chinese spy began, Nvidia has lost an eye-watering sum from its market value.
- Despite owning 13.4% of the company, Zuckerberg controls about 60% of the company’s voting power because his class B shares give him 10 votes each compared to one vote for every class A share.
- “If the CEO doesn’t do his job according to 12, 13, 15 board members, however sized the board is, that CEO is let go.” This reality sets Nvidia apart from other Silicon Valley companies, especially those still run by a cofounder.
As Huang alluded to in his January podcast interview, Nvidia’s bylaws are written in such a way that the company’s CEO can be removed by the board for any reason and at any time—still, Huang lacked enough voting power to independently elect or remove Nvidia’s directors.
Additional details
- Nvidia’s board opened an independent investigation into Huang and the possibility he may have been a target of a foreign intelligence operation after reporting by the New York Times explored his close relationship with a businesswoman that U.S.
- Even at Google parent company Alphabet, where cofounder Sergey Brin and cofounder and former CEO Larry Page no longer run day-to-day operations, the pair still collectively retain majority voting control of the tech giant.
- While founders with majority voting control, such as Zuckerberg, can effectively determine who sits on their boards, Huang would have needed support from other Nvidia shareholders to do the same.
- Snap, the social media company, has a similar arrangement with CEO and cofounder Evan Spiegel controlling 53% of the company’s voting power while only owning about 9.3% of the company.
- “In a well-governed company, the CEO was always designed to report to the board of directors and the board of directors report to shareholders,” Huang said in a January podcast interview with Jodi Shelton.
How this summary was made: extractive summary — built from the sources' own reporting. It is drawn only from the reporting of the sources listed below — read the originals for full detail. How we summarize →
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