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Public pension fund executives from New York, Illinois and three other states have reiterated their call to Facebook CEO Mark Zuckerberg for him to relinquish his role as president, because of the increased support from the company's external investors.
The acrimony of the shareholders can only contribute to the intensification of the pressure that Zuckerberg is already facing from the legislators and the federal regulators. The Wall Street Journal reported Monday that the Federal Trade Commission, which is about to hit Facebook for a multi-billion dollar fine for violation of privacy, has been seen to grant the right to Open a survey of the giant social networks for monopolistic practices.
"The island boardroom of Facebook must be open because the company has no responsibility to its users, investors or our democracy," said New York City Comptroller Scott Stringer , whose fund controls 750 million shares of Facebook, in a statement. "Appointing an independent chairman of the board of directors is a necessary first step, supported by shareholders who hold the majority of Facebook shares, but whose voting rights are not commensurate with their owners."
Michael Frerichs, Illinois Treasurer, added, "It's time for the company to separate the roles of Chairman of the Board and Chief Executive Officer. Right now, Mr. Zuckerberg is both chairman of the board and chief executive officer, his own boss, and clearly that does not work.
Facebook declined to comment on the statements, as well as similar remarks by treasurers in Connecticut, Rhode Island, and Pennsylvania.
The stock
FB + 0.40%
slightly increased by 0.1% in afternoon trading, but slipped by 2.1% in the last three months. In comparison, the Nasdaq composite index
COMP + 0.64%
decreased by 0.2% over the last three months and the S & P 500 index
SPX, + 0.82%
gained 1.2%.
Longtime fighters have been encouraged by the results of Facebook's shareholder meeting last week, released Monday night. This shows that 68% of external shareholders supported a proposal to make the President an independent position – a significant leap from the 51% who achieved a similar measure in 2017.
"This level of support is rarely seen in shareholder proposals," said Wednesday at MarketWatch, during a phone call, Jonas Kron, senior vice president of Trillium Asset Management, a Facebook shareholder for 8 , $ 5 million. "The last two years of endless controversy and missteps have led to the growing realization that there is too much power in the hands of a person (Zuckerberg)."
Outside shareholders have increasingly voiced their disapproval of how Zuckerberg and the company he co-founded managed a vast technology platform now reaching 2.38 billion active users per month and exercising considerable influence on almost every aspect of social interaction in the world.
However, their usual claims, dating back to early 2018, are unlikely to be met, as Zuckerberg and other insiders control nearly 60% of Facebook's voting rights through a special class of shares that holds 10 times the voting power of ordinary shares.
Stringer, Frerichs and the treasurers of the states of Pennsylvania and Rhode Island, who all have public funds with Facebook, joined in October a shareholder proposal to remove Zuckerberg from his presidency.
The proposal, originally filed by Trillium Asset Management in June, listed a host of reasons, including data breach by Cambridge Analytica; Russian interference in the 2016 presidential election; social media dependence; and the spread of "false news". The group then added a breach in September that had touched 30 million Facebook accounts, as well as the exodus of executives from WhatsApp and Instagram.
Do not miss: Opinion: Facebook continues to panic in the eyes of several storms.
"Zuckerberg and others control a large majority of the voting shares, but it would be wise to learn from the Alphabet lesson, whose co-founders have appointed Eric Schmidt to the position of General Manager" said Kron. "Setting up an independent chair of the board would serve Facebook well."
Last month, Alex Stamos, a former security executive on Facebook, suggested that Microsoft hire Microsoft Corp.
MSFT, + 2.17%
President Brad Smith as CEO and Zuckerberg move to the position of President. Smith helped the software giant to make peace with government regulators in the early 2000s, while he was subject to scrutiny of his business practices.
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