According to US media reports, a group of Facebook shareholders put pressure on the company to expel CEO Mark Zuckerberg from the board of directors. Based on the proposals submitted by these shareholders, they believe that the election of an independent chairman can better “supervise company executives, improve corporate management, and develop a more responsible and beneficial shareholder work planâ€.
The idea of ​​expelling Zuckerberg from the board comes from Facebook shareholders and members of the consumer protection organization SomeOfUs. The organization claims to be an online community whose activities are to hold companies accountable for issues such as climate change, workers' rights, discrimination, human rights, corruption and corporate power struggles. Facebook is advised to refuse to comment on this, but according to the standard practice of shareholder recommendations, the company may issue a statement when submitting the proxy document in April.
Lisa Lindsley, a capital market consultant at SomeOfUs, said that 333,000 people signed the petition and asked Facebook to improve corporate responsibility, but only 1,500 were true shareholders of the company. She said: "The stocks held by the four independent members of SomeOfUs make us eligible to submit proposals." The proposal cites the new capital structure approved by Facebook last year as an example of the company's power imbalance.
At the company's shareholder meeting in June last year, shareholders were asked to vote for the issuance of Class C stocks to keep Zuckerberg in control of the company. Although the vote was passed, at least one shareholder filed a lawsuit against Facebook, alleging that it was an unfair vote. The issuance of Class C stocks is to help Zuckerberg continue his long-term vision and “encourage†him to participate in corporate affairs for a long time. Zuckerberg and his wife Dr. Priscilla Chan announced in 2015 that they would donate 99% of family stocks to various groups to promote equality for children.
The shareholder’s proposal states that the election of an independent chairman can increase shareholder value. “This person can balance the power of the CEO and the board of directors and support the strong leadership of the board.†The proposal also stated that the independent chairman on Facebook "has faced inconsistencies in misleading news, censorship, hate speech and Facebook community standards guidelines and content policies, cooperation with law enforcement agencies and other government agencies, and public responsibility for the impact of Facebook practices on human rights. On the increasing criticism of the role played, it can play a "particularly constructive" role.
It’s not a case for a person to be both a CEO and a chairman. Tesla, Bank of America, Walt Disney, IBM, Amazon, and so on. There is a big question whether Facebook will comply with the requirements of the group. In particular, Zuckerberg is the largest shareholder and can easily repeal this proposal with the consent of other shareholders. Some people still think that the founder's power is good for the company, especially in the pursuit of the first goal in the field of virtual reality and video. In addition, Facebook's financial situation is not dangerous, stocks continue to rise, and its latest earnings report is beyond analysts' expectations.
But SumOfUs may be worried that Zuckerberg will let Facebook act according to his will and put the company's interests behind it, which may damage the value of shareholders. The proposal states that an independent chairman can prevent this. If Facebook adopts this recommendation, new independent directors will join. Lindsley admitted that it was difficult for SumOfUs to get approval at the company's annual investor meeting. She said: "This shareholder resolution is the same as the majority shareholder resolution. It is essentially a recommendation. Even if 99% of the people support it, the board has no legal obligation to enforce it. However, most competent boards realize that it is unwise to ignore the voices of the shareholders they represent."
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