Facebook shareholders push to remove Zuckerberg as chairman

Claire Tourigny October 18, 2018

Some of Facebook’s most prominent shareholders want Zuckerberg out. Well, not out of the company entirely, that’d be ridiculous. But they do want him to step down as chairman of the billion dollar social media.

Facebook shareholders push to remove Zuckerberg as chairman

Yesterday, state treasurers from Rhode Island, Pennsylvania, and Illinois joined forces with the New York City Pension Fund, and signed off on Trillium Asset Management’s proposal for Zuckerberg’s removal from his seat on the board. Combined, these organizations hold almost five million Facebook shares between them.

The proposal calls for an independent chairman, citing Facebook’s mishandling of several key controversies, including: “Russian meddling in U.S. elections, sharing personal data of 87 million users with Cambridge Analytica, data sharing with device manufacturers, including Huawei that is flagged by U.S. Intelligence as a national security threat, proliferating fake news, propagating violence in Myanmar, India, and South Sudan, depression and other mental health issues, including stress and addiction, and allowing advertisers to exclude black, Hispanic, and other “ethnic affinities” from seeing ads.”

All of this is happening in the wake of Facebook’s recent data breach, which put more than 30 million accounts at risk.

This isn’t the first time shareholders have called for Zuckerberg’s replacement. A similar proposal was filed in April, shortly before his Senate testimony concerning the Cambridge Analytica scandal.

“Facebook plays an outsized role in our society and our economy,” said New York City comptroller Scott Stringer. “… An independent board chair is essential to moving Facebook forward from this mess, and to reestablish trust with Americans and investors alike.”

Stringer’s opinion is shared by everyone who signed off on the proposal. “As we confront the ways in which Facebook’s technology has outstripped our ability to understand how it affects society,” said Jonas Kron, a senior vice president at Trillium, “it is time to put limits on Zuckerberg and make some structural changes.”

The proposal will be voted on during next year’s shareholder meeting, but unfortunately, it’s unlikely to actually go through. Regardless of the shareholder’s opinions, Mark Zuckerberg currently controls about 60% of the company’s voting power, which is a problem in itself. This makes the proposal more symbolic than anything else.

Still, this unrest could have some major effects. In fact, Facebook’s stock price has been falling since late July, going from $217 (£165.27) to around $159 (£121.10). The hope for the shareholders is that the unrest will cause Zuckerberg to step down from his role, but that also seems unlikely.

The company has publicly slammed the idea of separating the CEO and chairman role, stating that this split would “cause uncertainty, confusion, and inefficiency in board and management function and relations.” This was said despite the fact that over half of the S&P 1500 have these roles separated, including Microsoft, Apple, Oracle, Twitter, and Google.