Investors will attempt to oust Mark Zuckerberg as chairman of Facebook’s Board of Directors at Facebook’s annual meeting on May 30.
Activist Investors Pushing to Oust Mark Zuckerberg
Activist investors controlling more than $3 billion in shares are making a push to oust Mark Zuckerberg as the chairman of Facebook’s Board of Directors, as well as other changes to Facebook’s corporate governance, according to a new report in Business Insider.
This isn’t the first time voting members of Facebook have challenged Zuckerberg’s control over the company but this challenge to Zuckerberg’s authority comes after a brutal year for Facebook. Thanks to the share structure of Facebook, there are two classes of stock, Class A stock and Class B stock; with Class B stock having 10 times the voting power per share as Class A stock.
Zuckerberg owns 75 percent of Facebook’s Class B stock, giving him more than half of the voting power in any decision, giving him complete effective control of the company. The activist investors, who so far haven’t been identified, filed a stockholder proposal that would abolish the two class stock structure in favor of a single vote per share structure.
Another proposal that will be voted on would force Zuckerberg out and appoint an independent chairman to help lead Facebook after several major scandals this year have put the company in an increasingly negative light.
Facebook Wants Shareholders to Vote Down The Proposed Reforms
Facebook, for its part, has told its shareholders that they should vote down the proposals.
"We believe our board of directors is functioning effectively under its current structure, and that the current structure provides appropriate oversight protections," the company said. "We do not believe that requiring the Chair to be independent will provide appreciably better direction and performance, and instead could cause inefficiency in board and management function and relations."
Last year, Business Insider was first to report on plans by Trillium Asset Management to file for governance reforms after the “mishandling” of the Cambridge Analytica scandal as well as other embarrassing missteps by the company.