Author Topic: Facebook Shareholders Vote to Oust Mark Zuckerberg as Chairman  (Read 466 times)

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Offline RomanCatholic1953

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    Facebook shareholder revolt gets bloody: Powerless investors vote overwhelmingly to oust Mark Zuckerberg as chairman


    Facebook CEO Mark Zuckerberg. Getty




    • Independent Facebook investors voted overwhelmingly in support of proposals to fire Mark Zuckerberg as chairman and scrap the firm’s share structure.
    • According to the results of votes at Facebook’s annual shareholder meeting last week, 68% of outside investors want the company to hire an independent chairman. The majority was up from 51% last year.
    • Despite the revolt, the proposals did not pass because of Zuckerberg’s voting control of the stock, which means he can swat away shareholder demands.
    • “Arrogance is not a substitute for good corporate governance,” said Michael Connor, who helped coordinate action among activist Facebook investors.
    • Visit BusinessInsider.com for more stories.
     
    The Facebook shareholder revolt just got bloody.
    In a filing on Monday, Facebook revealed how investors voted on a raft of proposals at its annual shareholder meeting last week — and the results underline the unrest among outside investors.
    According to an analysis of the results by Open Mic — an organization that works with activist shareholders to improve corporate governance at America’s biggest companies — independent shareholders overwhelmingly backed two proposals to weaken Mark Zuckerberg’s power.
    Some 68% of ordinary investors, those who are not part of management or the board, want to oust Zuckerberg as chairman and bring in an independent figure to chair Facebook’s board. This was a significant increase on the 51% who voted in favor of an almost identical proposal last year.
    Shareholders are furious at the way Zuckerberg has handled a series of Facebook scandals, including election interference on the social network in 2016 and the giant Cambridge Analytica data breach last year. They think the company would benefit from an independent chairman holding Zuckerberg and his top team accountable.
    Facebook’s share price fell dramatically last year following the Cambridge Analytica disaster, while weaker than expected growth compounded the downturn. The stock has not fully recovered after hitting a high of $217.50 on July 25 last year. Shares plunged 7.5% to $164.15 on Monday following news of a potential antitrust investigation.
    Furthermore, 83.2% of outside shareholders also backed a proposal to scrap Facebook’s dual-class share structure. Currently, Class A shareholders have one vote per share, while Class B shareholders get 10 votes per share. Management and directors control Class B shares.
    Read more‘It is unwise to have so much power concentrated in one person’: Here’s the stinging message that will be read to Mark Zuckerberg on Thursday by an investor who wants to take him down
    In fact, Zuckerberg happens to own more than 75% of Class B stock, meaning he has roughly 60% of the voting power at Facebook. He and colleagues voted down the independent chairman proposal and the dual-class share plans, meaning they were crushed despite the uprising from outside investors. Put another way, if Zuckerberg and his closest allies disagree with shareholders, they always have the trump card.
    In a statement sent to Business Insider, Open Mic’s executive director Michael Connor said the results send a clear message to Facebook management. “The results speak for themselves. Mark Zuckerberg and the Facebook board need to listen to the company’s shareholders. Arrogance is not a substitute for good corporate governance,” he said.
    “Investors are clearly concerned and want change,” added Jonas Kron, who runs activist shareholder Trillium Asset Management, which put forward the call for an independent chairman. “This level of support is rarely seen in shareholder proposals.”
    Business Insider has contacted Facebook for comment.


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    Offline Dolores

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    Re: Facebook Shareholders Vote to Oust Mark Zuckerberg as Chairman
    « Reply #1 on: June 06, 2019, 09:12:36 AM »
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  • Not that I want to defend Zuckerberg, but who cares what these shareholders say?  As the article mentions, it's Zuckerberg's company.  He owns 75% of the stock, so he gets to say who is in charge.

    If you operated a business, and owned a 75% stake of it, would you do bend to the whims of your partner who only owned a 25% stake?


    Offline Disputaciones

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    Re: Facebook Shareholders Vote to Oust Mark Zuckerberg as Chairman
    « Reply #2 on: June 06, 2019, 12:39:44 PM »
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  • Not that I want to defend Zuckerberg, but who cares what these shareholders say?  As the article mentions, it's Zuckerberg's company.  He owns 75% of the stock, so he gets to say who is in charge.

    If you operated a business, and owned a 75% stake of it, would you do bend to the whims of your partner who only owned a 25% stake?
    "Who cares what shareholders say"?? Where do you think the money comes from?

    Shareholders are directly affected by a company's performance, and if the Zuck is doing bad things that will hurt performance, like all those scandals already have, then you bet they have the right to get him fired.

    It doesn't matter it's "his company" because there would be no company at all if it were not for the shareholders.

    Offline Dolores

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    Re: Facebook Shareholders Vote to Oust Mark Zuckerberg as Chairman
    « Reply #3 on: June 06, 2019, 07:15:34 PM »
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  • "Who cares what shareholders say"?? Where do you think the money comes from?

    Shareholders are directly affected by a company's performance, and if the Zuck is doing bad things that will hurt performance, like all those scandals already have, then you bet they have the right to get him fired.

    It doesn't matter it's "his company" because there would be no company at all if it were not for the shareholders.
    They only invested enough money to own 25% of the company.  Zuckerberg himself owns 75% of the shares.  He’s the only shareholder that matters.  Don’t put scare quotes around “his company.”  He owns 75% of the shares, it is unquestionably his company, and no, what the other shareholders think doesn’t matter.

    Offline Disputaciones

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    Re: Facebook Shareholders Vote to Oust Mark Zuckerberg as Chairman
    « Reply #4 on: June 06, 2019, 07:27:08 PM »
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  • They only invested enough money to own 25% of the company.  Zuckerberg himself owns 75% of the shares.  He’s the only shareholder that matters.  Don’t put scare quotes around “his company.”  He owns 75% of the shares, it is unquestionably his company, and no, what the other shareholders think doesn’t matter.
    And how much money did he himself invest in the beginning?


    Offline AlligatorDicax

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    Not ousted/Re: Facebook Shareholders Vote to Oust Mark Zuckerberg [...]
    « Reply #5 on: June 06, 2019, 07:40:26 PM »
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  • [....]  It doesn't matter it's "his company" because there would be no company at all if it were not for the shareholders.

    Not so.  Zuck had already developed at least 1 preliminary version of the Facebook software [*].  So I assume that outside investments would've been focused on scaling-up and polishing his preliminary version enough to shove MySpace aside.  But without Zuck, they'd have had nothing in which to invest, unless they expected a favorable return from, e.g., MySpace.


    "Who cares what shareholders say"??
    Where do you think the money comes from?

    Ummm, the venture-capital entity In-Q-Tel, which was created by intelligence-agencies within the U.S. Dept. of Homeland Security?  I wonder what share-class it holds.


    Shareholders are directly affected by a company's performance, and if the Zuck is doing bad things that will hurt performance, like all those scandals already have, then you bet they have the right to get him fired.

    Uh, huh.  Before buying shares, anyone who will be "directly affected" by the performance of a company with such a share-structure should have investigated & considered the consequences of that share-structure, e.g., for any efforts to change its management, if that could conceivably become desirable at any time in the future.  It's a truism in Silicon Valley that the right person to lead a start-up company to attention-getting early success, might not be the right person to lead that successful company thro' profitable growth, nor the right person to maintain profitable success as it reaches some kind of maturity.

    And maybe more importantly, the consequences for liquidation or sale of the company, because that structure might specify allocating practically all proceeds to holders of the more-favored share-class, leaving practically nothing to holders of the less-favored class.

    -------
    Note *: I believe that my claims about Zuckerberg's earlier versions of Facebook came from an article in WIRED from several years ago.  Despite my leaning toward the rights of inventors-via-software like Zuck, I dislike the man for his dismissal of concerns about on-line privacy, and descriptions of his personality that I've read from time to time.  I've yet to encounter a flattering picture of his personality.


     

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