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FaceBook Investors Want Mark Zuckerberg To Step Down

mark zuckerbergThere is a revolt happening among Facebook shareholders right now. Reports say that investors who own a total of $3 billion in Facebook shares are pushing for chairman and CEO Mark Zuckerberg to step down. This comes in the wake of a series of scandals such as election tampering and unscrupulous data selling which have damaged the company’s public reputation.

Facebook went public in 2012 and has faced challenges like any other company. However, this is the most contentious time in the company's history as investors are angry and frustrated at how Zuckerberg has led the social media giant in recent years.

The investors who are upset with Zuckerberg command nearly $3 billion worth of Facebook shares and their solution is to throw him out and to tear up any support he has left in the company. The current structure a Facebook allows Chairman Zuckerberg to run things the way he pleases with very little accountability.

Wochit Business

These rebel investors have two main demands. First of all, they want Zuckerberg out. They believe his mismanagement is behind the recent scandals that have plagued the company and want an independent executive as the new CEO.

Second, they want to remove the dual-class share structure. Facebook operates by having two types of shares: Class A and Class B. Class A shares have the normal voting power that a lot of normal shareholders know. However, Class B shares have ten times the normal vote. Which means that every Class B vote is equal to ten Class A votes. The problem is that Zuckerberg owns 75% of the Class B shares making him virtually untouchable in his decisions as CEO.

Zuckerberg Has Unfair Advantage Over Other Investors

In a statement, Michael Connor, the director of Open Mic which is an organization that helps shareholders get their fair say in corporate governance, said

When you combine the dual roles of chairman and CEO, plus that chairman and CEO personally owns a majority stake of that company, that's a toxic brew. It means there's very little room for any kind of descent

Zuckerberg’s powerful vote has been used to crush a lot of investor dissent in the past 13 months. A stunning example of this was when a vote to remove Zuckerberg as chairman was put forward and quickly crushed. This is despite 51% of the independent shareholders agreeing to the move. Similarly, a move was made to remove the dual-class share structure in May 2018. This was also voted down despite the 83% support from independent shareholders.

Investors have become increasingly critical of Facebook and want better management for the company, pointing to other tech giants that faltered despite their seeming strength like AOL and Yahoo.

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