Facebook shareholders urge company to replace Mark Zuckerberg
Facebook is being pressured by a group of shareholders seeking the removal of company chief executive Mark Zuckerberg from the board of the directors. A proposal has been put forward claiming that an independent chairperson would be better able to “oversee the executives of the company, improve corporate governance, and set a more accountable, pro-shareholder agenda.”
The idea for Zuckerberg’s board ousting comes from Facebook shareholders who are members of the consumer watchdog group SumOfUs. The organization bills itself as an online community that campaigns to hold corporations accountable on a variety of global issues such as climate change, workers’ rights, discrimination, human rights, corruption, and corporate power grab.
Facebook declined to comment on the proposal, but it’s likely to issue a statement when it files a proxy filing in April, as is per standard practice with shareholder proposals.
The proposal cites the new capital structure approved by Facebook last year as an example of where there was an imbalance of power. During the company’s shareholder meeting in June, participants were asked to vote on a proposal to issue Class C shares in a bid to keep Zuckerberg in control. Although approved, Facebook is dealing with litigation brought on by at least one shareholder who claimed it was an unfair deal.
Issuing the Class C shares was intended to help Zuckerberg continue his long-term vision and “encourage” him to remain involved with the company over the long term. The plan came after the Facebook CEO announced in 2015 that he and his wife, Dr. Priscilla Chan, would be giving away 99 percent of his family’s shares to various groups in a bid to promote child equality.
The proposal states that shareholder value will be enhanced with an independent board chair “who can provide a balance of power between the CEO and the board and support strong board leadership.”
Photo - Eduardo Munoz/Reuters