A second Facebook investor wants Mark Zuckerberg out as chairman.
Zuckerberg controls Facebook thanks to the way the company’s stock is structured, meaning he has final say on the future direction of the company.
That’s frustrating for activist investors who watched the Cambridge Analytica scandal wipe $60 billion off the firm’s market cap over the past few weeks.
Now is a golden opportunity for those investors to gang up and call for Zuckerberg to step down.
Mark Zuckerberg’s Congressional grilling last week was a reminder that he is still in total control of Facebook.
Thanks to the firm’s stock structure, its public investors — even those with $1 billion (£70 million) holdings — don’t have much say on the company’s future.
Facebook has two classes of shares. Class A shares trade under the “FB” ticker on public markets and come with one vote per share. Class B shares are only available to insiders and have 10 votes per share.
Zuckerberg owns lots of Class B stock, and therefore has 60% of the voting power. He’s also Facebook’s chairman. In other words, if he wants something to happen at Facebook, it happens.
Now that Zuckerberg and Facebook are under closer political scrutiny over the Cambridge Analytica data scandal, Facebook’s powerless activist investors have picked an opportune time to criticise the firm’s structure.
Illinois’ treasurer is the latest investor to call for Zuckerberg to step down as chairman.
“In essence Mr Zuckerberg is not accountable to anyone,” Michael Frerichs told the Financial Times. “Not the board, nor the shareholders. Right now, Mr Zuckerberg is his own boss and it’s clearly not working.”
Frerichs oversees college savings funds for Illinois citizens, and is known for using the investments to pressure companies to do good. His holdings in Facebook are not clear.
What is certain, however, is that …read more
Source:: Business Insider