Funds Back Proposal to Remove Zuckerberg as Facebook Chairman
October 17 2018 - 11:47AM
Dow Jones News
By Deepa Seetharaman
Several public funds with holdings in Facebook Inc., including
New York City's pension funds, are backing a shareholder proposal
to push out Chief Executive Mark Zuckerberg as chairman of the
social-media giant's board of directors.
The state treasurers of Rhode Island, Illinois and Pennsylvania,
as well as the New York City comptroller are joining the
shareholder proposal previously filed by Trillium Asset Management
in June, the state officials said in a release on Wednesday.
The announcement has no practical effect on Mr. Zuckerberg and
his position as both CEO and chairman because he has a lock on the
bulk of Facebook's supervoting shares, each of which gives him 10
times the votes of average shareholders. According to Facebook's
latest proxy, his share of the voting power among Facebook
investors was 59.9%.
Still, the news heightens scrutiny of the company's corporate
governance after a string of missteps and controversies, and
reflects a view among at least some investors that Mr. Zuckerberg
needs additional support guiding the company.
Trillium's proposal called on Mr. Zuckerberg to relinquish his
role as chairman given Facebook's mishandling of several
controversies that have enveloped the company in recent years,
including the spread of misinformation on the platform and its role
in promoting violence in countries like Myanmar. Most recently,
Facebook revealed a data breach that hurt 30 million accounts.
"An independent board chair is essential to moving Facebook
forward from this mess, and to reestablish trust with Americans and
investors alike," said New York City Comptroller Scott Stringer in
a statement.
Mr. Stringer oversees the city's more than $195 billion pension
fund, including 4.7 million shares in Facebook as of the end of
March 31. Pennsylvania Treasury holds 38,737 shares of Facebook.
Rhode Island owns 168,230 shares of Facebook. The company overall
is worth nearly $460 billion.
Facebook shares are down about 27% since July, when the company
projected weaker-than-expected revenue growth. Several key
executives, including the cofounders of Instagram and WhatsApp,
have left the company following tussles with Mr. Zuckerberg and
other senior Facebook leaders.
A similar proposal to split Facebook's chairman and CEO roles
has gained support from outside investors in the past. In 2017,
slightly more than 50% of votes cast favored splitting the roles,
after excluding the shares held by 13 executives and board members,
including Mr. Zuckerberg, the release on Wednesday said.
The proposal will next be put to a vote at the company's
shareholder meeting in May 2019.
Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
October 17, 2018 11:32 ET (15:32 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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