Facebook Shareholders Force A Vote On Ousting Mark Zuckerberg (businessinsider.com) 107
On May 30th, Facebook's shareholder's will vote on whether to remove Mark Zuckerberg as chairman of the board, reports Business Insider:
Business Insider broke the news of the proposal in July last year after revealing the plans of activist shareholder Trillium Asset Management, which had grown tired of the "mishandling" of scandals including the Cambridge Analytica data breach. Responding to the proposal in the SEC filing, Facebook called on investors to vote it down. "We believe our board of directors is functioning effectively under its current structure, and that the current structure provides appropriate oversight protections," Facebook said...
The chance of it becoming a reality is extremely slim, despite it being backed by investors that control around $3 billion of Facebook stock. A similar proposal in 2017 was popular among independent investors but was crushed because of Zuckerberg's voting power. This is because of Facebook's dual-class share structure. Class B shares have 10 times the voting power of class A shares, and it just so happens that Zuckerberg owns more than 75% of class B stock. It means he has more than half of the voting power at Facebook....
Facebook will almost certainly get its way. But the two investor proposals mark continued dissatisfaction among shareholders about the way Facebook is run following a year from hell for the company. It also shows that investors continue to believe that Zuckerberg has too much power.
The chance of it becoming a reality is extremely slim, despite it being backed by investors that control around $3 billion of Facebook stock. A similar proposal in 2017 was popular among independent investors but was crushed because of Zuckerberg's voting power. This is because of Facebook's dual-class share structure. Class B shares have 10 times the voting power of class A shares, and it just so happens that Zuckerberg owns more than 75% of class B stock. It means he has more than half of the voting power at Facebook....
Facebook will almost certainly get its way. But the two investor proposals mark continued dissatisfaction among shareholders about the way Facebook is run following a year from hell for the company. It also shows that investors continue to believe that Zuckerberg has too much power.
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Why would anyone pay for stock and the "privilege" to spend time running a company?
Zuckerberg: Seems immature. 2) Comfortable lying. (Score:2)
"Raving lunatic" doesn't seem correct to me. I'm amazed at 2 things about Zuckerberg:
1) After all these years, to me he still looks somewhat like and acts a lot like a young teenager, or even a 12-year-old: 2018 photo [gettyimages.com].
2) Zuckerberg seems completely comfortable with lying.
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Hey Zuck, WTF do you think shares are? They are shares of ownership which means you get a say in how the company is run. Don't like that? Form a partnership and give up on the lucrative opportunity to exchange ownership for money.
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If you believe that, then what's so wrong about the guy having more than half the shares getting his way?
The fact that he doesn't have more than half the shares? He has 10% of the shares, but they are tagged so that they have 10 times the voting rights of the other shares, so with only 10% of the company, he still gets 50% of the control.
Activist shareholders (Score:4, Insightful)
Buying non-shares (Score:2)
Why would any sane investor do that except at a substantial discount?
Google did a similar trick.
You are putting money into something that you have no control over. E.g. Zuck's salary.
Re:Buying non-shares (Score:5, Informative)
Why would any sane investor do that except at a substantial discount?
Because most investors are interested in making money, and not in "having a say".
I have never, not once, cast a vote for a board member or sent in a proxy form. I just toss them in the trash. So why should I care if I have voting rights, when I don't exercise them?
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It's like the two things are entirely disconnected.
As in "You're not getting a dividend, I'm going to give tons of company money to a non-profit owned by my fat minger wife's cat and you can go pound sand".
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And such things have happened; you need to have a great deal of trust in someone with a controlling interest in your investment. But there are remedies, as it's extremely illegal to do that; it's called "shareholder oppression". Courts can and will force compensation for this. It's suboptimal solution, but it's something.
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Yup, it was all clearly laid out in the IPO, I remember because I was totally like "WTF?".
Now IANAL but common sense would suggest that Fuckabug & his cronies wouldn't have bothered trying all that shenanigans if they didn't know it would stand up in court.
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I have never, not once, cast a vote for a board member or sent in a proxy form. I just toss them in the trash. So why should I care if I have voting rights, when I don't exercise them?
If you had 50% of your retirement invested in a fund that the CEO went off the deep end and started dismissing every moral and ethical policy in existence, marching quickly towards criminal territory all in the name of profits and the Board was prepared to do fuck-all about it, would you care if you had voting rights then?
Even if you didn't vote in the last US election, you should at least understand and respect the value of having a Right to Vote. I've yet to use my 4th Amendment right. Does that mean I
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It's the height of stupidity to have 50% of your retirement in any one company, no matter how awesome you may think it is.
When I retire, I plan to have 60% in a total stock market fund (VTSAX) and 40% in various fix income index funds and CDs.
VTSAX has about 2% invested in FB. Should I research every company in VTSAX in order to vote accurately on a proxy form?
No. And I'm quite happy that Vanguard doesn't even send me a proxy form. Only thing worse than not voting is voting when not educated on the matte
Only shareholders get a vote (Score:2)
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Why should America have nuclear bombs if it doesn't launch them?
And on the other side, many things in this world that can't presently be fixed could be fixed if fewer people took your attitude. It still wouldn't be a panacea, but it would be better.
Nothing good comes from punters sleeping on their powers, however small. Good decisions generally derive from high engagement of all stakeholders, and not so much from round-file target prac
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"I have never, not once, cast a vote for a board member or sent in a proxy form. I just toss them in the trash. So why should I care if I have voting rights, when I don't exercise them?"
You should send a proxy, usually, they get a meal and a couple of glasses of cheap wine. What's not to like?
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Too much power? It's his company, and yours to choose whether to invest in it or not. Now I despise FB and everything it stands for as much as the next guy, but good on Zuck for having retained a controlling interest in his company. Maybe I've seen too much of the other extreme, with VCs asking for too large a piece of the pie in exchange for a pittance.
Bottom line is hiring and firing of CEOs is not the job of shareholders.
This is exactly why you have a fucking Board of Directors.
If they feel he needs to go, then execute the proper process to do so. If you've failed to establish that process and absolutely have given up control and power to one person, then you've utterly failed to establish a Board that can actually Direct the company, to include replacing leadership when necessary, and I have little sympathy for any company in this position. History
Re: Activist shareholders (Score:1)
If it's a private company yeah, but they Are not a private company anymore. They decided to raise public funds and with it comes onerous oversight and scrutiny and challenges.
I expect that if I buy anything listed in public exchanges conforms to the regulatory expectations and obligations and I expect that if I have even 1 share I am entitled to the rights that my 1 share entitled me to.
It's facebook's own fault if they don't like it. They decided to IPO.... no one forced them.
Ignorant not Insightful (Score:1)
If you read the second paragraph you will see that it is no longer his company, but he retains control through a clear abuse of process.
Re:Activist shareholders (Score:5, Insightful)
"It's his company, "
clearly you dont understand the equity marketsl. Rember when facebook did its IPO (Initial public offering)? The second word there is key.
I would never invest in facebook, and it is time for a reform program to avoid all this restricted voting, superclass share nonsense.. but fundamentally, it isnt his company anymore... he took public funds, and kept all the voting rights too.
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It's his company
Yah, no. It's a public company.
cry me a river... (Score:3)
you could just... you know... invest in another company if you don't like that one.
Holding 3 billion of stock with basically no decision rights. That's a cute position to be in. How greedy do you have to be?
I have to wonder (Score:2)
.. how that situation can possible even be legal.
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I realize that he still owns a majority of FB shares
You'd be wrong about that. He owns a majority of votes (about 57%) but only a small minority of shares. In other words, while controlling Facebook, he only owns a small fraction of its market value and earnings.
Against Zuckerberg's outright voting control are security laws that protect the rights of minority shareholders, thus giving them the power to make life miserable for Zuckerberg should he get on the wrong side of them.
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Yeah, you're right. Zuckerberg knows he won the lottery and is otherwise just a standard issue scumbag voyeur. Elon Musk: fountain of creative energy. Mark Zuckerberg: fountain of jizz.
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If he doesn't suck, he should resist...
It's the opposite, actually.
If you knew that you are mediocre at best, but you had a lucky shot - you would cling to it like your life depended on it, because it actually does (not your physical life, but your financial and social life).
If you knew that you're good and you'll be just as successful with your next venture, you wouldn't hang on to the current one so much. Maybe it's boring already. Something new, maybe? Yeah, why not...
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You seem to think that people exist for the benefit of companies.
I think you found the one thing that Zuckerberg and me agree on - that it's the other way around. Zuckerberg founded Facebook and certainly seems to be under the impression that it is his and exists for his benefit. I agree that companies exist for people, not the other way around.
Gates stepped aside smartly because his "road to the future" (sorry for the cheap pun) would've ruined MS in very short order. He missed every important technologica
The chance of it becoming a reality is extremely (Score:4, Insightful)
slim.
Class B shares have 10 times the voting power of class A shares, and it just so happens that Zuckerberg owns more than 75% of class B stock.
Right, I'm sure he'll just oust himself. This is news why? Because Trillium Asset Management is bored?
Axiomatic (Score:1)
It is obviously the first move in a process to prove abuse of power with regard to his fiduciary responsibility to shareholders. The next major step will be to use the courts, perhaps as a threat, to wrestle equal voting rights to investors. Once they have that they will have a power to maximise profits at the expense of their users.
I'm certainly not a fan, but in this case he is probably acting in FB's users best interests wrt privacy.
Trillium Asset Management? (Score:4, Insightful)
Trillium Money Grabbers more like. I'm no fan of facebook - don't use it - or zuckerberg, but its his baby, he created the company and these parasites have him to thank for the increasing value of their investments. If they don't like it they're free to take their dirty gold elsewhere.
Re:Trillium Asset Management? (Score:5, Insightful)
Then Zuck shouldn't have taken the company public if he didn't want outside investors to have a say in a company. That's the deal. It is partially their company too.
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Outside investors don't have a say in the company. Zuckerberg has it set up so he got the cash from selling shares while still maintaining complete control.
Trillium management is trying to send a message that those who they blame for 2016 will be punished, even though it was Hillary herself who blew the election.
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but its his baby
It was his baby until he sold it to the public. Now his baby grew up but he didn't.
Mishandling? (Score:5, Informative)
How has the scandal been mishandled? It looks like a textbook response of attempting to avoid and shift all blame while doing the bare minimum to appease 3rd parties.
What do they prefer? Full ownership and action? That is the BP / VW way (except for the action bit) and is now a case study in business textbooks of what not to do.
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He admitted the failings, instead of brushing them under the carpet and thereby impacted future earning by limiting their opportunities to exploit their assets, FB users.
huh? (Score:1)
The disaffected shareholders could just sell their shares.
Problem solved. Facebook's value would plummet but with the shares sold, it isn't their problem anymore.
Re:huh? (Score:4, Insightful)
just another dog whistle? (Score:1)
Trillium is an activist investor, in this case "activist" meaning they want to push their social agenda on corporations [trilliuminvest.com].
A cynic would see their FB actions as marketing for their "socially responsible" mutual fund. In other words playing to their (SJW) base, a carefully tuned dog whistle just like Trump's border wall.
They wont really do it (Score:3)
This is just some kind of grandstanding. Even if Zuckerburg didn't have the controlling shares to stop this I think other key share holders would stop him from being ousted. Despite all the main stream media hate I think Zuckerburg has handled the "scandals" pretty well and most shareholders know this.
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This is just some kind of grandstanding. Even if Zuckerburg didn't have the controlling shares to stop this I think other key share holders would stop him from being ousted. Despite all the main stream media hate I think Zuckerburg has handled the "scandals" pretty well and most shareholders know this.
Grandstanding with a purpose though.
Right now he's chairman & CEO, if other share-holders vote overwhelmingly for him to resign as chairman he'll probably give up one of his titles or at least find some individual they support to give a senior title.
Even if other share-holders vote as a majority for him to stay, but there's still a strong minority opposed, then he'll probably feel pressured to change things to bring that minority back onside.
If the vote sputters out, well then his leadership is strength
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I think some powerful interests aren't too happy that Trump was elected under Zuckerberg's watch. It was after that when Facebook became under such intense media scrutiny, under the flimsy pretext of election 'interference'. Even though Facebook is ramping up the censorship and deplatforming now, it's probably too little too late.
TPTB want a sock puppet in charge of one of the largest most influential social media sites, and I sincerely doubt that is Zuckerberg. They also tend not to be very forgiving once
Investor-centric FB will be much, much worse (Score:5, Interesting)
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Data Breach ? (Score:5, Insightful)
Every piece of data they gathered was allowed by the site rules
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True, and it was Facebook who collected and sold the data to Cambridge Analytica. Nothing in that process was surprising to anyone involved and all parties followed their mutual contracts. The data breach happened when the evil scheme was published and even the most idiotic FB users found out how they were manipulated.
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Incorrect again.
The data was not "collected and sold" to Cambridge Analytica.
Cambridge Analytica collected the data, DIRECTLY, using APIs available to them at the time. Facebook did not "collect and sell" the data.
Facebook actually does not sell bulk data, at all.
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Every piece of data they gathered was allowed by the site rules
As the child of this notes, it was gathered under an academic use contract, but then resold for non academic uses. That doesn't really make it better, since, well once the data is collected it is pretty much going to get abused. The solution is not to allow legally all this collection, and to throw the people in jail who authorize it.
Having Zuckerberg in charge or not is almost irrelevant.
Vote? (Score:3)
Why would the shareholders hold any votes if a single person has over half the votes?
Re: Vote? (Score:3, Insightful)
To let that person know if the course isnâ(TM)t corrected, a mass sell-off might happen, devaluing his stock prices.
It's a fucking social media company (Score:2)
Datamining their users and selling access to them is what they do.
Zuck might for the moment be a lightning rod for what is wrong with the company, but I doubt getting rid of him will help the companies image for very long. The reality of the way they make money and its side effects will come up time and time again regardless.
At the same time you lose someone who runs the company because he cares for it rather than purely for the money. Seems like a poor deal to me.
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Even worse, sold out USA to the Russians.
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Even worse, sold out USA to the Russians.
I'm sure those who concocted that narrative are glad some people are still parroting it. 100k of facebook ad buys is nothing out of the ordinary.
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Traitor trump [priceofoil.org] created that narrative himself.
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I'm not sure what an example of how the left can't meme has to do with why the Russian meddling narrative is a deliberate ploy [fair.org] with nothing but appeal to authority to back it up.
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The US people sold themselves out, especially if they were dumb enough to let social media control their voting preferences.
We're having internet censorship inflicted upon us because social media wasn't effective enough at controlling voting preferences. For a rare, brief moment, people actually had a choice. That mistake won't happen again.
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Too equine.