By CCN: Facebook shareholders need Mark Zuckerberg to step down as chairman, saying he runs the social media monopoly “essentially as a dictatorship.”
Investors additionally slammed the tech juggernaut for its barrage of data-breach scandals, which they are saying has eroded public belief within the social community.
A bunch of shareholders made the bombshell revelations in an April 12 SEC filing. The proposals have been made in preparation for Facebook’s annual shareholders assembly, which is scheduled for May 30.
Board Shot Down All 8 Shareholder Proposals
Facebook unwittingly confirmed that it does certainly “operate essentially as a dictatorship” when it flatly rejected all eight shareholder proposals.
In their first proposal, shareholders known as for Zuckerberg to get replaced by an impartial chair. They declare that Zuckerberg — who has been chairman since 2012 — wields an excessive amount of energy over the corporate as its controlling shareholder, chairman, and CEO.
“His dual-class shareholdings give him approximately 60% of Facebook’s voting shares, leaving the board — even with a lead independent director — with only a limited ability to check Mr. Zuckerberg’s power…We believe this weakens Facebook’s governance and oversight of management.”
Board Rejected Similar Proposal In 2017
Facebook responded by vigorously defending Mark Zuckerberg and rejecting the shareholder proposal to oust him.
The board claims that the simplest management mannequin entails Zuckerberg serving as each chairman and CEO.
“We do not believe that requiring the Chair to be independent will provide appreciably better direction and performance, and instead could cause inefficiency in board and management function and relations.”
The board additionally identified that it had rejected an identical shareholder proposal again in 2017.
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— CCN.com (@CCNMarkets) January 18, 2019
Data Scandals Tanked Facebook’s Market Cap
In one other proposal relating to “content governance,” shareholders blasted Facebook for its tsunami of privacy breaches, which they blamed on gross mismanagement.
The livid traders underscored that the scandals induced Facebook’s worth to tank at file ranges throughout numerous factors in 2018.
“News of Cambridge Analytica’s misappropriation of millions of Facebook users’ data preceded a decline in Facebook’s stock market capitalization of over $100 billion dollars in March 2018…Another $100-billion-plus decline in market value — a record-setting drop — came in July 2018 after Facebook’s quarterly earnings report reflected increasing costs and decreasing revenue growth.”
Investors: Public No Longer Trusts Facebook
Furthermore, the activist shareholders famous that public trust in Facebook has tumbled as a results of the corporate’s privateness lapses.
Accordingly, the board requested for Facebook to compile a “Content Governance Report” detailing what steps it’s taking to forestall future knowledge breaches.
“Pew Research found 44% of young Americans have deleted the Facebook app from their phones in the past year, and 74% of users have either deleted the app, taken a break from checking the platform, or adjusted privacy settings.”
The board as soon as once more rejected the proposal. It insisted that Facebook may be very clear about its content material insurance policies and due to this fact, doesn’t must justify them any additional to its shareholders.
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— CCN.com (@CCNMarkets) January 24, 2019
Steve Wozniak: I Lost Respect for Zuckerberg
As CCN reported, Mark Zuckerberg has been underneath hearth amid revelations that Facebook violated consumer privateness by promoting their private knowledge to 3rd events for years — with out their consent.
Even Apple co-founder Steve Wozniak trashed Zuckerberg, saying he misplaced respect for the billionaire. This is notable as a result of Wozniak has a repute for being very easygoing.
“I lost a lot of respect for Mark Zuckerberg watching him speak, and supposedly taking some steps that are nothing. I don’t trust that.”
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— CCN.com (@CCNMarkets) February 27, 2019