Jensen Huang’s Resignation Raises an Important Question: Why Do Tech Company Founders Need a Dual-Class Share Structure?

Your question raises an interesting issue that goes to the heart of corporate governance in the United States:

Why can the founder of a company, who has worked so hard to build it into a trillion-dollar business, potentially be removed by the company's own board of directors? Should founders use a dual-class share structure to ensure that they retain control over their companies?

I believe your observation has merit. If Jensen Huang had adopted a dual-class share structure, similar to those used by Meta and Google, the situation might have been very different.

1. Why Did Jensen Huang Resign from NVIDIA?

Jensen Huang is the co-founder of NVIDIA and has served as its CEO and chairman for many years.

According to the reports discussed in this article, Huang announced his resignation on November 12, 2026, following developments involving personal conduct, corporate reputation, and national security concerns.

The situation reportedly involved several factors:

1. Personal relationship controversy: Media reports disclosed allegations concerning Huang's extramarital relationship. He reportedly acknowledged being unfaithful to his wife and apologized to employees.

2. National security investigation: Reports raised concerns involving a woman suspected by U.S. intelligence agencies of having connections to Chinese intelligence. These allegations should not be treated as proven facts.

3. Corporate governance and board pressure: The board had to consider the company's reputation, management credibility, national security risks, and shareholder interests.

It is important to distinguish these reported developments from established facts. Huang's departure should not simply be interpreted as a judgment that he lacked the ability to run NVIDIA. Rather, the situation involved a combination of personal, corporate, and governance issues.

2. Does NVIDIA's Board of Directors Have Too Much Power?

The answer is that, under the American corporate governance system, a board of directors does have substantial authority, although that authority is not unlimited.

The basic governance structure of a publicly traded American corporation is:

Shareholders → Board of Directors → CEO and Management Team

• Shareholders own the company's stock and exercise voting rights.

• The Board of Directors represents shareholders, oversees the company, and appoints or removes the CEO.

• The CEO and management team are responsible for daily operations and executing the company's business strategy.

There are several important distinctions here.

First, a CEO does not automatically own the company or have permanent control over its management.

Even though Jensen Huang founded NVIDIA, he does not have an automatic legal right to remain CEO forever.

The board generally has the authority to appoint and remove the CEO, subject to applicable law and the company's governing documents.

Second, the board cannot simply do whatever it wants.

Directors have fiduciary duties and must act in accordance with their legal obligations and the interests of the corporation and its shareholders. Shareholders also have voting rights that can be used to replace directors.

Therefore, this is not simply a matter of the board having unlimited power over the founder. It is part of the checks-and-balances system in American corporate governance.

However, there is a more interesting question:

If a founder has majority voting control of the company, can the board still easily remove that founder as CEO?

In most circumstances, doing so would become considerably more difficult.

3. Could NVIDIA Have Used a Dual-Class Share Structure to Protect Jensen Huang's Position?

I believe this is the most important part of the discussion.

Many American technology companies use a corporate ownership arrangement known as a Dual-Class Share Structure.

Under this arrangement, a company typically issues two classes of shares:

Let's consider a simple example.

Suppose a company issues one billion shares:

• The founder owns 100 million Class B shares, each carrying 10 votes.

• Public investors own 900 million Class A shares, each carrying one vote.

The result would be:

The founder's economic ownership: 10%

However, the founder would control:

52.63% of the company's total voting rights.

The calculation is:

1 billion votes ÷ (1 billion + 900 million votes) = 52.63%.

This creates an interesting situation:

The founder owns only 10% of the company's economic value but controls more than half of its voting power.

Consequently, public investors may own 90% of the company's economic interests but cannot independently determine the composition of the board through ordinary shareholder voting.

4. How Do Other Technology Giants Handle Founder Control?

Several major technology companies have adopted dual-class or multiple-class share structures.

Meta — Mark Zuckerberg

Zuckerberg owns a relatively small percentage of Meta's total economic interests but maintains substantial voting control through his Class B shares, which carry enhanced voting rights.

This gives him considerable influence over director elections and major shareholder decisions.

Alphabet (Google's Parent Company) — Larry Page and Sergey Brin

Google also uses a multi-class share structure. Its founders hold Class B shares with enhanced voting rights, allowing them to maintain substantial control even when their economic ownership represents a much smaller percentage of the company.

NVIDIA — Jensen Huang

NVIDIA, in contrast, uses a one-share, one-vote structure rather than giving its founder special voting rights.

Huang owns approximately 3.58% of NVIDIA's shares, based on the ownership figure discussed in this article. Although he is the company's founder and a major individual shareholder, he does not have enough voting power to independently determine the composition of the board.

This is an important difference between NVIDIA and companies such as Meta and Alphabet.

If NVIDIA had adopted a dual-class structure and Huang had retained more than 50% of the voting rights, other shareholders generally could not have easily changed the board through ordinary shareholder voting without his support.

Of course, dual-class shares do not eliminate the board's legal authority or exempt the founder from legal responsibilities.

5. If Jensen Huang Had Controlled 51% of the Voting Rights, Would This Situation Have Happened?

We can examine this question from three perspectives.

First: It would have been much more difficult for the board to remove him.

If Huang controlled more than 50% of the voting rights, he would generally have substantial influence over shareholder elections and the selection of directors.

If most board members were supported by him, it would become much more difficult for the board to remove him against his wishes.

Second: He would not have been completely immune from legal consequences.

Even under a dual-class structure:

• Directors would still have fiduciary responsibilities.

• The company would still be subject to securities regulations and stock exchange requirements.

• Super-voting rights would not protect anyone from personal liability involving fraud, criminal conduct, or other violations of law.

• Serious corporate problems could still create pressure from investors, business partners, and regulators.

Furthermore, dual-class shares primarily protect voting control. They do not necessarily guarantee that a founder can never be removed as CEO under the company's governing documents and applicable law.

Third: Even if the board could not easily remove him, Huang could still choose to resign voluntarily.

This is an important distinction.

Super-voting rights can protect a founder's control over the company, but they cannot guarantee that the founder will always want to remain CEO.

Nor can they eliminate the consequences of personal conduct that might affect a company's reputation and business relationships.

6. An Important Corporate Governance Question

Jensen Huang spent more than three decades building NVIDIA from a graphics-chip company into one of the most important companies in the global AI industry.

However, his ownership represents only a relatively small percentage of the company.

This creates an interesting distinction:

Most of the company's economic interests belong to other shareholders, while its long-term business strategy has been heavily influenced by its founder.

There are two different approaches to corporate governance:

Both systems have advantages and disadvantages.

For example, technology entrepreneurs such as Mark Zuckerberg and Elon Musk have used or benefited from different forms of special voting arrangements.

These structures can reduce the influence of short-term market pressures and allow founders to pursue long-term strategies.

However, they can also make it difficult for outside investors to challenge a founder's decisions, even when investor confidence declines.

7. My Overall Perspective

I believe the question you raised about NVIDIA and dual-class shares reflects an important investment and corporate governance principle:

Creating a company's value and owning its economic interests are two different things. Likewise, owning a large percentage of a company does not necessarily mean having actual control over it.

If I were founding a technology company, I would seriously consider adopting a dual-class share structure before taking the company public.

For technology companies that depend heavily on their founders' vision, technical expertise, long-term strategy, and leadership, retaining a certain degree of control can have significant business value.

At the same time, I would establish reasonable checks and balances to prevent the company from becoming completely dependent on one individual.

In NVIDIA's case, Huang's decision not to adopt a dual-class share structure is an interesting historical corporate governance choice worth examining.

However, we cannot conclude that adopting dual-class shares would definitely have prevented his resignation.

A more accurate conclusion is that dual-class shares might have changed the board's ability to exercise control over him, but they could not have guaranteed that he would never leave the company for other reasons.

This is also why investors should look beyond financial statements, earnings growth, and stock prices when evaluating publicly traded companies.

They should also ask an important question:

Who actually controls this company?

Gang Chen, Publisher/Bestselling Author (GreenExamEducation.com)

Architect, LEED AP BD+C, Real Estate Broker (BRE# 01232392)