Facebook investors will vote to oust Mark Zuckerberg as president



Facebook's activist investors will again try to overthrow Mark Zuckerberg as president and remove what they view as an unfair stock structure.

In a report filed Friday by the Securities and Exchange Commission, Facebook announced its annual shareholders meeting on May 30 and confirmed proposals from investors who will be the subject of a vote during the event. .

Zuckerberg and the rest of the board are familiar with two shareholder proposals, two of which are well-known: investors are again trying to impose governance changes on the social network.

One of them is titled "Shareholder Proposal Regarding an Independent Chairman" and pleads for the destruction of Zuckerberg as chairman of the board of directors, with the appointment of 39, an independent leader in his place.

Mark Zuckerberg as president

Business Insider announced the proposal last July after revealing the plans of shareholder activist Trillium Asset Management, tired of "abusive treatment" of scandals, including data breach by Cambridge Analytica.

Read more: These investors control $ 3 billion of Facebook shares and want to bring down Zuckerberg

In response to the proposal in the SEC's file, Facebook called on investors to reject it.

"We believe that our board of directors functions effectively as part of its current structure and that this structure provides appropriate control protections," said Facebook.

"We do not believe that requiring the Chairman to be independent will provide significantly better management and performance, and may instead result in inefficiency in the functions and relationships of the Board of Directors and management. . "

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The chance that this will become a reality is extremely small, even though it is backed by investors who control about $ 3 billion of Facebook shares. A similar proposal in 2017 was popular among independent investors, but was crushed because of Zuckerberg's voting power.

This is due to Facebook's two-class sharing structure. Class B shares have 10 times the voting rights of Class A shares, and it turns out that Zuckerberg holds more than 75% of Class B shares. This means that he has more than half of the rights. voting on Facebook.

Tear apart the sharing structure

Zuckerberg's significant weight is why activist shareholders want to abolish the stock structure. At the annual meeting of investors, they will have the opportunity to vote on a proposal calling for the introduction of "fair and appropriate mechanisms to eliminate the disproportionate rights of Class B shareholders."

He said, "False information, interference in elections and threats to our democracy – shareholders need more than deny, hijack and delay." We urge shareholders to vote FOR a recapitalization plan allowing all outstanding shares to dispose of one vote per share ".

The proposal that was developed by the investor is not clear, but Facebook again asks that it be revoked by its shareholders, as was the case at the last five annual meetings. "We believe that our capital structure is in the best interest of our shareholders and that our current corporate governance structure is sound and effective," he said.

Facebook will almost certainly get its way. But the two investor proposals mark persistent shareholder discontent over how Facebook is headed after a terrible year for the company. It also shows that investors continue to believe that Zuckerberg has too much power.


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