It seems like Facebook shareholders are not happy with CEO Mark Zuckerberg. They have filed a petition to remove him from the company’s board of directors. If the petition is accepted, Mark’s term as Facebook CEO may end up soon.
The proposal has been filed by the corporate group SumOfUS, who hold major stocks in Facebook. In its proposal, the organization claims that the social media network is restraining the growth of other corporations. The proposal further states that a new person should be appointed as CEO who can better understand the working of an organization, improve corporate governance, and set more accountable shareholder agenda.
Here’s what the proposal reads:
In our view, shareholder value is enhanced by an independent board chairman who can provide a balance between the CEO and the board, along with supporting strong board leadership. Independent board leadership is clearly needed at Facebook following the board’s decision last year to approve a new capital which reduced the rights of Class A shareholders without even requiring a majority vote of these shareholders.
You can read the full proposal here.
The proposal also highlights Facebook’s corporate governance score in terms of risk. As of January 23, 2017, the social media network’s corporate governance score is 10. It states the highest level of risk.
The score is awarded by Institutional Shareholder Services, an organization that advises investors regarding corporate governance risks of companies listed in their investment portfolios. ISS has also proposed a vote against directors Susan Desmond-Hellman, Erskine Bowles, and Mark Andreessen for their roles in the creation of new non-voting Class C stocks. These stocks are aimed for running Zuckerberg’s philanthropy projects for which he would be selling his 99% shares.
The report further concludes that the appointment of a new chairperson will improve Facebook’s reputation at a time when it’s being accused of promoting hate speech, fake news, and other serious issues.
However, in the end, it’s the Facebook board led by Zuckerberg who’ll take the final decision.
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Mark Zuckerberg is founder and CEO of Facebook. He’s been the company’s board chairman since 2012. He also owns stocks in the company. So, we don’t think this proposal of SomeOfUs members will make any impact on Facebook’s decision-making process.
What do you think about Facebook shareholders’ proposal to remove CEO Zuckerberg? Please let us know in comments.