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Several public funds with holdings in Facebook Inc., including New York City pension funds, are backing a shareholder proposal to replace Chief Executive Mark Zuckerberg as chairman of the board. administration of the social media giant.
State Treasurers of Rhode Island, Illinois and Pennsylvania and New York City Comptroller Join Trillium Asset Management's Proposed Shareholder Proposal in June, Business Leaders Announced Wednesday in a statement.
The announcement has no tangible effect on Mr. Zuckerberg and his position as Chairman and Chief Executive Officer and Chairman of the Board, as he controls the bulk of Facebook's monitoring actions, each of which earns him 10 times more votes than the average number of shareholders. According to Facebook's latest proxy, its vote share among Facebook investors was 59.9%.
The news, however, deepens the in-depth study of corporate governance after a series of missteps and controversies, and reflects the view of some investors that Zuckerberg needs additional support to guide the company.
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Trillium's proposal called on Zuckerberg to relinquish his role as president due to Facebook's mismanagement of several controversies that have enveloped society in recent years, including the spread of misinformation on the platform and its role in promoting violence in countries like Myanmar. More recently, Facebook revealed a data breach that affected 30 million accounts.
"An independent board chairman is key to moving Facebook forward and out of this mess, as well as restoring trust with Americans and investors," said New York City Comptroller Scott Stringer.
A spokeswoman for Facebook declined to comment.
Stringer oversees the city's pension fund of more than $ 195 billion, including 4.7 million shares on Facebook at the end of March 31. These actions are currently valued at more than $ 745 million. The three states supporting the measure have smaller holdings of approximately 200,000 shares valued at approximately $ 32 million. In total, Facebook represents nearly 460 billion dollars.
Facebook shares are down about 27% since July, when the company was forecasting lower-than-expected revenue growth. Several key executives, including Instagram co-founders and WhatsApp, have left the company as a result of battles with Zuckerberg and other senior Facebook executives.
A similar proposal to split the roles of chairman and chief executive of Facebook has already benefited from the support of external investors. In 2017, just over 50% of the votes cast were in favor of splitting roles, after excluding shares held by 13 executives and board members, including Mr Zuckerberg, the statement said on Wednesday.
The proposal will then be voted on at the company's shareholders meeting in May 2019.
Write to Deepa Seetharaman at [email protected]
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