Zuckerberg in trouble as Facebook shareholders file proposal to oust him

Darnell Taylor
October 20, 2018

Four major USA public funds which hold shares in Facebook proposed removing CEO Mark Zuckerberg as chairman - and said they hoped to gain backing from larger asset managers.

Mr Frerichs, along with Rhode Island State Treasurer Seth Magaziner, Pennsylvania Treasurer Joe Torsella, and New York City Comptroller Scott Stringer, join an earlier proposal from investment management firm Trillium Asset Management that was filed in June. They argue that separating Facebook's chairman and CEO roles is "in the best interest of shareholders, employees, users, and our democracy". Last year, a similar proposal gained support of 51% of the votes cast, excluding the shares of Facebook's top executives and board members. Meanwhile, the new proposal is slated for a vote at Facebook's annual shareholder meeting in May 2019.

Five Facebook shareholders are fighting back against Mark Zuckerberg's control of the company he founded after several scandals have plummeted share price.

Facebook (FB) did not immediately respond to a request for comment.

In a regulatory filing previous year, Facebook said on the matter: "We do not believe that requiring the chairman to be independent will provide appreciably better direction and performance, and instead could cause uncertainty, confusion, and inefficiency in board and management function and relations".

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Looming controversies have cost Facebook its reputation, major Facebook investors said, adding that Zuckerberg's ouster would in a way help "reestablish trust with Americans and investors alike".

The New York City Pension Funds holds around 4.5 million Facebook shares, while the Pennsylvania Treasury held 38,737 shares.

The official joint announcement pointed out Facebook's critical role not only in today's society but of the global economy. Recently, Facebook confessed that data breach had affected personal data of 30 million users. Three of the aforementioned funds also supported a proposal in 2017 to create an independent board, though numerous largest shareholders voted against the proposal.

In April this year, Facebook Inc confirmed the data leak of personal information of around 87 million people with political analyst firm Cambridge Analytica, data which was used to influence U.S. presidential elections.

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