Facebook: public funds ask to remove Zuckerberg as CEO

Major Facebook investors, including public pension funds and state officials, are pushing for Mark Zuckerberg’s ouster as chairman of the company’s board.

The proposal is largely symbolic, since Zuckerberg holds absolute control of the board. But it comes at a difficult time for Facebook, as security breaches plague the company and spur questions around corporate oversight.

Zuckerberg owns an estimated 17 per cent of Facebook equity but a dual share class gives him a majority of voting shares, making it difficult to oppose him.

Trillium, formed as a fund focused on socially responsible investing, said an independent chair would bring Facebook into line with recommendations of corporate governance experts, and said it would make the proposal at the annual shareholder meeting in May 2019. The investment firm noted that Google, Microsoft, Apple, Oracle and Twitter have separate CEO and chair roles, as do a large number of other publicly traded firms.

The group said a similar proposal made in 2017 received support of 51 per cent of the votes cast when excluding the shares of 13 executives and board members.

“We are entering a new phase of Facebook’s growth,” said Jonas Kron, a senior vice president at Trillium.

“At a time like this, we really need to have independent board leadership that can provide strong guidance and enforce real accountability.”

In a regulatory filing last year, Facebook said on the matter: “We do not believe that requiring the chairman to be independent will provide appreciably better direction and performance, and instead could cause uncertainty, confusion, and inefficiency in board and management function and relations.”

Similar motions to reclaim voting power have been made before, though none has passed. The latest proposal will be voted on at Facebook’s next shareholder meeting next year.

A spokesperson for Facebook declined to comment.