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Facebook Inc. has always had an absolute leader, cemented by a stock clbad structure that has maintained control of the Mark Zuckerberg voices, even when it has sold millions of shares. Some investors grumbled, but most were happy to remain silent while the stock jumped. This week's dive reversed this dynamic, increasing calls for changes at the top.
"This is never a problem until things go wrong," said Brian Wieser, an badyst at Pivotal Research Group. He thinks that a change in Facebook's leadership is inevitable, and said the latest figures could hasten that. A spokesman for Facebook declined to comment:
Thursday, Facebook has dropped 20%, costing investors $ 120 billion – the biggest single-day loss in history. Shareholders who had survived months of renewed debate over Facebook's role in the company and the ethics of its business model suddenly turned around when they realized that growth had run out. on the main application of Facebook. David Wehner, CFO, said growth rates would decline in terms of "high single-digit percentages."
The loss of faith encouraged voices that asked Zuckerberg to further share his voting power and to give up "Zuckerberg only responds to Zuckerberg," said Jonas Kron, director of defense of shareholders of Zuckerberg. Trillium Asset Management, which last year supported a shareholder proposal to replace Zuckerberg as chairman of the board. . Since Thursday 's sale, he has received new phone calls and e – mails from other investors expressing his support. He refused to identify these people.
For over a year, Facebook and other social media companies are under fire from policymakers and regulators for letting false news, Russian trolls and manipulators proliferate over their services. Now that they are cracking down, it's spoiling growth, frightening investors. Authentic accounts and real information can be good for longer term business. But Kron said that Facebook could have avoided some problems if Zuckerberg's power was controlled by an independent president.
Other major technology companies such as Microsoft Corp., Apple Inc. and Alphabet Inc. share the roles of CEO and President. Twitter Inc. suffered its own stock market crash this week, down 21% on Friday after stagnant user growth. He's about the same age as Facebook and has a similar mindset to the founders, but he already has a separate executive chairman
Zuckerberg holds too much power, said John Streur, managing director of Calvert Research and Management. Earlier this year, he worried about Facebook's approach to privacy and customer data. In April, when he realized that engaging with the company would not change much, his fund sold his shares Facebook.
"Facebook's governance structure remains below industry standards, with great authority concentrated in the founder and CEO," said Streur. "Shareholder rights are not well respected, limited controls are in place on executive compensation and concerns have been raised about the effectiveness of risk monitoring, including the risk of confidentiality and security . "
their dissatisfaction. In 2012, California State Teachers' Retirement System asked Facebook to separate the roles of CEO and President and to dispense with the stock structure that gave Zuckerberg such a hold. In April, Chris Ailman, chief investment officer of the pension fund, said the Facebook data privacy crisis was fueled by Zuckerberg's almost total control. Calstrs owned more than 4 million Facebook shares at the end of March, according to data compiled by Bloomberg.
When Zuckerberg attempted to sell his shares while retaining control, some investors sued. Last September, just before the lawsuit, Facebook fell back.
In a post on Facebook, Zuckerberg said he no longer needed the new stock structure because the company's stock had risen. he was able to finance his philanthropy without selling his interest too much. This week's dive will force the CEO to unload more of his shares to keep the same level of donations.
Zuckerberg's own words show how much the company could benefit from an independent director on his advice, Kron said. In blog posts and during his congressional appearance in April to explain how a Trump campaign-related company accessed millions of information, Zuckerberg said Facebook had not taken enough hindsight on his responsibility
. The chairman of the board of directors, "Kron said, said it would have been possible to bypbad Facebook's policy of allowing developers of third-party applications to exploit the company's data. user, which could have been avoided if someone had a broader and more questioning perspective.
Trillium proposed separating the roles CEO a few days before Wednesday's disappointing results. won the votes of 51% of the uninitiated investors, according to the investment firm.Kron expects this number to increase this time.
"It is difficult to". escape the conclusion that there are systemic problems in the way Facebook has been managed, "writes Pivotal's Wieser in a note before the results.While Mr. Zuckerberg maintains his right to vote, the fact of Having more independent members would give the m oins to shareholders more votes, said the badyst.
How should Facebook write the job description of a potential independent president? "Someone with gravitas, someone with vision, business and technology chops," Kron said. They would also need a "good understanding of social impacts. The ability to think of unintended consequences, "he said.
One suggestion: Bill Gates .The founder of Microsoft has experienced similar rapid growth, followed by a period of instability marked by a After a decade lost, the company emerged stronger, with new leaders and new strategies. "
" When Microsoft took the opposite, they had an independent chair, "said Kron. "Bill Gates Abandoned His Presidency."
– With the help of Olivia Carville, Sarah Frier and Jef Feeley
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