Seems like Facebook’s, in particular, Mark Zuckerberg’s problems are not going away any time soon. Just this last week a shareholder vote was held, where an overwhelming majority of the shareholders voted for Zuckerberg to be replaced as the chairman of the social networking giant by an independent director. The vote was held at the company’s annual meeting, with the tally being released on Monday. 68% of the shareholders voted for Zuckerberg’s oust from Facebook, a number which was up from the 51% majority that the corresponding vote tallied last year. However, in both these instances, the proposals did not get through because the 35-year-old founder still owns a majority of voting stock, which he used to nullify the shareholders’ vote. These stocks were also put to vote this time around, with more than 80% shareholders voting to eliminate the class of Zuckerberg’s share which represents 10 times the voting control of regular shares.
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Things seem to be picking up pace now though, with investors also starting to demand the ouster of the man who started Facebook from his dorm room at Harvard. Pension Funds have now started calling for Zuckerberg’s exit, citing the shareholder vote. Scott Stringer, New York City Comptroller and the man who oversees one of the pension funds that hold shares of the company said, “The company is depending entirely on one person, who is accountable to no one, to run the day-to-day and conduct oversight of the company’s ever-expanding operation, which demonstrates a lack of basic business sense and keeps the company in a constant state of turmoil. Facebook’s insular boardroom must be cracked open because the company has no accountability to its users, its investors, or our democracy.”
This sentiment continues the trend that has picked up since March 2018, when the Cambridge Analytica controversy erupted, shedding light on Facebook’s involvement in the USA presidential elections. This incident shed light on several privacy and security concerns, which have led to the founder being under pressure from all corners.
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The problems for Zuckerberg don’t just stop at his involvement and leadership of the company since his compensation from the company is under scrutiny too. Zuckerberg, with a net worth of $64.5 Billion, was paid $ 1 as salary last year. However, he did receive another $ 22.6 million which was mostly marked for security. More than 75% of the investors voted to put his salary under review annually, but Zuckerberg’s majority stakes enabled him to put the review to a 3-year cycle.
With the problems clearly brewing at the company, it remains to be seen how Zuckerberg wades through what comes next. While he and his loyal colleagues on the board have been able to keep the revolt at a bay so far thanks to the class structure in voting shares, he might have to start listening to shareholder sentiments sooner rather than later.
