By CCN: Facebook shareholders want Mark Zuckerberg to step down as chairman, saying he runs the social media monopoly "essentially as a dictatorship."
Investors also slammed the tech juggernaut for its barrage of data-breach scandals, which they say has eroded public trust in the social network.
A group of shareholders made the bombshell revelations in an April 12 SEC filing. The proposals were made in preparation for Facebook's annual shareholders meeting, which is scheduled for May 30.
Board Shot Down All 8 Shareholder Proposals
Facebook unwittingly confirmed that it does indeed "operate essentially as a dictatorship" when it flatly rejected all eight shareholder proposals.
In their first proposal, shareholders called for Zuckerberg to be replaced by an independent chair. They claim that Zuckerberg — who has been chairman since 2012 — wields too much power over the company as its controlling shareholder, chairman, and CEO.
"His dual-class shareholdings give him approximately 60% of Facebook's voting shares, leaving the board — even with a lead independent director — with only a limited ability to check Mr. Zuckerberg's power...We believe this weakens Facebook's governance and oversight of management."
Board Rejected Similar Proposal In 2017
Facebook responded by vigorously defending Mark Zuckerberg and rejecting the shareholder proposal to oust him.
The board claims that the most effective leadership model involves Zuckerberg serving as both chairman and CEO.
"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."
The board also pointed out that it had rejected a similar shareholder proposal back in 2017.
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Data Scandals Tanked Facebook's Market Cap
In another proposal regarding "content governance," shareholders blasted Facebook for its tsunami of privacy breaches, which they blamed on gross mismanagement.
The furious investors underscored that the scandals caused Facebook's value to tank at record levels during various points in 2018.
"News of Cambridge Analytica's misappropriation of millions of Facebook users' data preceded a decline in Facebook's stock market capitalization of over $100 billion dollars in March 2018...Another $100-billion-plus decline in market value — a record-setting drop — came in July 2018 after Facebook's quarterly earnings report reflected increasing costs and decreasing revenue growth."
Investors: Public No Longer Trusts Facebook
Furthermore, the activist shareholders noted that public trust in Facebook has tumbled as a result of the company's privacy lapses.
Accordingly, the board asked for Facebook to compile a "Content Governance Report" detailing what steps it's taking to prevent future data breaches.
"Pew Research found 44% of young Americans have deleted the Facebook app from their phones in the past year, and 74% of users have either deleted the app, taken a break from checking the platform, or adjusted privacy settings."
The board once again rejected the proposal. It insisted that Facebook is very transparent about its content policies and therefore, doesn't need to justify them any further to its shareholders.
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Steve Wozniak: I Lost Respect for Zuckerberg
As CCN reported, Mark Zuckerberg has been under fire amid revelations that Facebook violated user privacy by selling their personal data to third parties for years — without their consent.
Even Apple co-founder Steve Wozniak trashed Zuckerberg, saying he lost respect for the billionaire. This is notable because Wozniak has a reputation for being very easygoing.
“I lost a lot of respect for Mark Zuckerberg watching him speak, and supposedly taking some steps that are nothing. I don’t trust that.”
Last modified (UTC): April 25, 2019 5:43 PM