Facebook Inc (NASDAQ: FB) shareholders are expressing dissatisfaction with how Mark Zuckerberg runs the social media giant, and are now calling for him to give up the chairmanship of the company.
On Tuesday, public pension fund leaders said they want Facebook to separate the chairman and chief executive officer roles, both held by Zuckerberg, who helped co-found the company in 2004 alongside Andrew McCollum, Dustin Moskovitz, Eduardo Saverin, and Chris Hughes.
“Facebook’s insular boardroom must be cracked open because the company has no accountability to its users, its investors, or our democracy. Naming an independent board chair is a necessary first step that is supported by shareowners who own the majority of Facebook shares, but whose voting power is not commensurate with their ownership,” read a statement from New York City Comptroller Scott Stringer.
Facebook shareholders voted on twelve proposals during its annual shareholder meeting last week in Palo Alto, California. According to a filing Monday, ordinary shareholders that are not part of the board or management want Facebook to fire Zuckerberg as chairman, and hire an independent person to take the position.
The 35-year-old executive owns or controls 88.1% of Facebook’s Class B shares giving him too much control over the company. Class B shares have ten votes each share, while those with Class A shareholders have one vote for each share held.
The public pension fund leaders calling for Zuckerberg for Zuckerberg to step down as chairman are from Illinois, New York, Pennsylvania, Rhode Island, and Connecticut.
Zuckerberg continues to anger some shareholders because of how he has handled multiple scandals at Facebook, including dubious data privacy practices, the Russian interference in the 2016 election, and Cambridge Analytica data breach.
“Facebook’s independent investors agree that it’s time for the company to separate the Board Chair and CEO roles. Right now, Mr. Zuckerberg is both Board Chair and CEO, serving as his own boss, and clearly it’s not working,” said Michael Frerichs, treasurer for the state of Illinois.
Facebook Inc Profile
Facebook is the world’s largest online social network, with more than 2 billion monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos.
On the video side, the firm is in the process of building a library of premium content and monetizing it via ads or subscription revenue. Facebook refers to this as Facebook Watch. The firm’s ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products.
Users can access Facebook on mobile devices and desktop. Advertising revenue represents more than 90% of the firm’s total revenue, with 50% coming from the U.S. and Canada, and 25% from Europe. With gross margins above 80%, Facebook operates at a 40%-plus margin.