Following several high-profile scandals and allegations levelled against Facebook Chief Executive Officer, Mark Zuckerberg, four major Facebook Inc. investors have proposed his removal as chairman, hoping to get more support from other larger asset managers.
Illinois’ State treasurers, Rhode Island and Pennsylvania, and New York City Comptroller Scott Stringer sponsored the proposal.
Recall that a similar shareholder proposal seeking an independent chair on Facebook was trounced last year.
According to the Economic Times, Rhode Island State Treasurer, Seth Magaziner said that the latest proposal was still worth filing as a way to draw attention to Facebook’s problems and how to solve them. “This will allow us to force a conversation at the annual meeting, and from now until then — in the court of public opinion,” Magaziner said in a telephone interview.
However, Facebook spokesperson declined to comment on the development when contacted.
At least three of the four public funds supported the 2017 resolution as well. The current proposal, meant for Facebook’s annual shareholder meeting in May 2019, asks the board to create an independent board chair to improve oversight, a common practice at other companies.
It cites controversies that have hurt the reputation of the world’s largest social media network, including the unauthorized sharing of user information, the proliferation of fake news, and foreign meddling in U.S. elections.
Illinois State Treasurer, Michael Frerichs also said in an interview that, while an independent chair might not have prevented all the issues, “there might have been fewer of these problems and less of a drop-in share price” at the company.
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The 2017 resolution received the support of a slim majority of outside investors, according to the public fund leaders’ calculations. Magaziner and Frerichs said they planned to talk with larger Facebook investors in coming months to seek their support.
Among Facebook’s largest investors, the Vanguard Total Stock Market Index Fund and Fidelity Contrafund voted against the 2017 proposal, securities filings show, while the American Funds Growth Fund of America supported it.
In opposing the 2017 proposal, Facebook said an independent chair could “cause uncertainty, confusion, and inefficiency in board and management function and relations.” Zuckerberg has about 60 percent voting rights, according to a company filing in April.
The New York City Pension Funds owned about 4.5 million Facebook shares as of July 31, while Trillium held 53,000 shares.
The Pennsylvania Treasury held 38,737 shares and the Illinois Treasury owned 190,712 shares as of August. Rhode Island funds hold 168,230 Facebook shares, a spokesman said.
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