Last week, it was shareholders’ turn.
On Thursday, at Facebook’s annual meeting, CEO Mark Zuckerberg found himself confronted with a roomful of rebellion as angry activist investors forced what The Guardian reports were votes on six proposals to change the company’s governance or institute other reforms.
The proposals were all voted down, of course, courtesy of what one of those shareholder activists, James McRitchie, called Zuckerberg’s “corporate dictatorship.” McRitchie referred to US President George Washington’s decision to step down as president, telling Zuckerberg to be more like that, not like a certain Russian politician:
Mr. Zuckerberg, take a page from history. Emulate George Washington, not Vladimir Putin.
Zuckerberg doesn’t own the majority of voting shares. Nonetheless, Facebook’s stockholder voting structure allows the CEO to control the majority of votes, given that his shares have 10 times the voting power of regular investors’ shares. Hence, it was a foregone conclusion that Zuck and his board of directors would emerge from the meeting unscathed.
NBC News reported that the doomed proposals included one that called on the company to give all shareholders one vote per share, thus stripping Zuckerberg of his special voting rights.
It didn’t pass. Nothing passed.
During the meeting, one investor accused Facebook of violating human rights with its lack of care in handling users’ private data, which in recent months has come to light due to the fiasco involving Cambridge Analytica, et al., as well as in a class action lawsuit regarding facial recognition …among many other issues.
Christine Jantz, chief investment officer at NorthStar Asset Management, said during the meeting that recent headlines point to Facebook’s “poor stewardship” of user data:
If privacy is a human right, as stated by Microsoft’s CEO, then we contend that Facebook’s poor stewardship of user data is tantamount to a human rights violation.
Another investor, Will Lana of Trillium Asset Management, said that his firm has been keeping track of the scandals in which Facebook is embroiled. It’s tallied “at least 15 distinct controversies,” he said, as he spoke in favor of a proposal to change the board’s approach to risk management:
The proof of the current structure’s inadequacies is on display in the current headlines.
Of course, making these kind of headlines isn’t good for the company’s bottom line, another investor said, according to the Wall Street Journal’s Deepa Seetharaman:
“Scandal is not good for the company’s bottom line.” -- another investor. This meeting is typically so boring (so much so that an investor asked Zuckerberg to follow Warren Buffet's example because it was so dull). This is the sharpest criticism I've seen since covering $FB.— Deepa Seetharaman (@dseetharaman) May 31, 2018
One heckler who shouted, “Shareholder democracy is lacking at Facebook” and who asked Facebook shareholders to vote against electing Zuckerberg to the board was removed from the meeting, USA Today reported.
For his part, Zuckerberg stuck to the same talking points and the “we’ve got more to do” approach he’s adopted to respond to politicians and the media in the past year or so, as furor has grown over a long list of failings, including Facebook’s use as a platform for fake news, bots, scams and US presidential election meddling.
“The big theme we’re focused on is making sure we take a broader view of our responsibility to everyone we serve,” Zuckerberg said, before going on to talk about the company’s initiatives to increase advertising transparency, improve content moderation, and prevent election interference.
There was only one piece of news that came out of the meeting: during a Q&A session, Facebook chief operating officer Sheryl Sandberg announced that the company plans to adopt a “diverse slate approach” when it comes to choosing members of its board of directors. The approach requires the company’s hiring managers to consider candidates from underrepresented groups when filling an open position.