Facebook Inc. (FB) is facing calls by some shareholders for Chief Executive Mark Zuckerberg to relinquish his role as chairman at the company’s shareholder meeting on June 1 as they clamor for a more independent stance from the board of the social media giant.
Facebook is against the proposal, but according to a report in TheStreet.com, some shareholders are upset with Facebook board’s move back in 2016 to approve a new capital structure that lowers the rights of Class A shareholders. In the new board proposal, shareholders said having the chairman of the board also serve as CEO “weakens a corporation’s governance, which can harm shareholder value.” The shareholders are calling for the chairman to be independent director, which would mean Zuckerberg would have to give up that role, which he had held since 2012. (See also: Facebook: Zuckerberg Sold $1B in Stock This Year.)
Facebook: We've Enough Oversight
Facebook has recommended shareholders vote against the proposal, arguing the board has enough oversight via independent director Dr. Susan Desmond-Hellman, which TheStreet.com reported acts as the liaison between Zuckerberg as chairman and the rest of the independent directors. "Our Lead Independent Director role ensures effective representation of the interests of all stockholders," Facebook said, pointing out that five of its eight directors are independent ones, reported TheStreet.com. (See also: Facebook's Declares Total War On Fake News.)
The call for Zuckerberg to give up his role as chairman comes at a time when Facebook is facing controversies over fake news, violence on its Facebook Live video service (including the recent Cleveland murder) and a backlash from advertisers concerned with the placement of their ads. At the same time, shares of Facebook have been surging and are up more than 18% so far this year. Other proposals for the June 1 shareholder meeting include issuing a report on the impact fake news had on the network itself. Facebook wants shareholders to reject that proposal, as well, saying it is proud of the fact that it is an open platform and that it already takes actions to rid its platform of fake news and spam posts. Over the weekend, Facebook removed tens of thousands of accounts that were part of an illegal ad network. Facebook said in a blog post it has been working to fight the spam network for six months.