Facebook shareholders propose removing Mark Zuckerberg as chairman

FILE- Facebook's CEO Mark Zuckerberg gestures and delivers his speech during the Viva Tech trade fair in Paris

Three state treasurers and the New York City comptroller have joined a shareholder proposal to strip Chief Executive Mark Zuckerberg of his chairmanship.

"They have a social and financial responsibility to be transparent - that's why we're demanding independence and accountability in the company's boardroom", said New York City Comptroller Scott Stringer in a statement released by Trillium.

The proposal said lack of independent board chair and oversight has contributed to Facebook "mishandling" a number of severe controversies, including Russian meddling in US elections and the Cambridge Analytica data leak. It also dealt with user trust and privacy backlash following the Cambridge Analytica scandal and a recent data breach that compromised up to 30 million user accounts. The fund holds 4.7 million shares in Facebook as of the end of the first quarter.

IL state treasurer Michael Frerichs said in an interview that, while an independent chairman might not have prevented all the issues, "there might have been fewer of these problems and less of a drop in share price" at the company.

The shareholder initiative (read it here) acknowledges that an independent director would have a limited ability to check Zuckerberg's power, but adds that separating the CEO and Chairman's roles would give the executive more time to focus on managing the company. Rhode Island State Treasurer Seth Magaziner explains, "This will allow us to force a conversation at the annual meeting, and from now until then in the court of public opinion". "Having an independent board chair, separate from the Mr. Zuckerberg's role as CEO, is in the best long-term interest of Facebook shareholders, including the members of Rhode Island's pension system". The effort is being led by Trillium Asset Management. Some 59% of the S&P 1,500 have similar arrangements as of April 2018, the group said.

Big public investment funds are throwing their weight behind a push to oust Mark Zuckerberg from the helm of Facebook's board.

The proposal, however, is also said to be largely symbolic: Zuckerberg owns 60% of the voting power among shareholders thanks to his owning a special kind of company stock that has 10 times the voting power.

A Facebook spokesperson declined to comment on the proposal. But in a proxy filing for 2017, the company noted a proposal to appoint an independent chair was voted down previously.

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