68% Of Facebook Investors Vote To Oust Mark Zuckerberg

Majority of Facebook investors sought the removal of founder CEO Mark Zuckerberg from the company’s chairman role.

The demand received 68 percent vote at the last shareholder meeting. They are seeking an independent director to adorn the chairman’s position.

This was evident in the details of voting trends at the recent annual meeting of Facebook released Monday. The votes had an upsurge of 17 percent over last year’s 51 percent.

But the move was shot down by Zuckerberg and a group of insiders using their leviathan 58 percent voting power coming from the special class shares owned by Zuckerberg.

The proposal to replace Zuckerberg was moved by Trillium Asset Management that holds nearly $7 million in Facebook shares. Trillium argues that concentration of power in the hands of a single individual has been at the root of problems and mishaps faced by the company.

Trillium Asset’s SVP Jonas Krone commented: “What we are seeing right now is really a quite deep well of concern of the concentration of power in one individual like we see with Mark Zuckerberg.”

Also, 82 percent of votes were cast seeking the elimination of the special class of shares held by Zuckerberg that gave him 10 times more voting power over regular shares.

Zuckerberg has been using the special voting shares that vested him 58 percent voting stake to maintain his control over the company.

Why is Zuckerberg’s leadership under challenge?

Zuckerberg’s leadership has been under lens since March 2018 after the Cambridge Analytica whistleblower scandal erupted triggering fears of compromise on privacy-related issues by the social media giant.

Now Facebook is readying to shell out $3 billion to $5 billion to settle the privacy probe kicked off by the Federal Trade Commission.

Anti-trust concerns over Facebook are also under the scrutiny of regulators.

However, Facebook FB stock was up 2 percent on Tuesday.

Remove Zuckerberg

Meanwhile, New York City Comptroller Scott Stringer who manages a city pension fund involving Facebook shares reiterated his call for the ouster of Mark Zuckerberg from the chairman’s role.

“The company is depending entirely on one person, who is accountable to no one, to run the day-to-day and conduct oversight of the company’s ever-expanding operation, which demonstrates a lack of basic business sense and keeps the company in a constant state of turmoil,” Stringer said in a statement.

Using the phrase, “Facebook’s insular boardroom”, he said, the time has come to crack open it as its utter lack of accountability to users, investors, and democratic principles are glaring now.

Krone also urged Zuckerberg to look around and see how Alphabet, Apple, Autodesk, and Microsoft have set up independent board chairs.

Krone specifically pointed to the management model of Alphabet wherein a dual-class structure exists yet there is an independent chairman along with a founder/CEO.