Facebook institutional investors want Zuckerberg ousted as chairman

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Amidst increasing incidences of data breaches such as the Cambridge Analytica scandal that saw the personal data of 87 million Facebook members used without permission, to Russian sourced posts aimed at influencing the midterm elections, a report from Reuters states that four institutional investors in Facebook are looking to have Zuckerberg replaced by an independent chairman. A similar proposal was defeated by stockholders in 2017.

The filing asking for a vote to remove Zuckerberg was made to Facebook’s board by the state treasurers of Illinois, Rhode Island and Pennsylvania, who together run state pension funds with holdings in Facebook. Joining them was New York City Comptroller Scott Stringer. If the board allows it, stockholders will vote on the matter and will be able to submit their votes right up to the date of the company’s annual stockholder’s meeting next May. Michael Frerichs, Illinois state treasurer, said that with an independent chairman at Facebook, “there might have been fewer of these problems and less of a drop in share price.”

Any votes to remove Zuckerberg as chairman of Facebook appear to be attempts at futility. With a majority of the company’s shares in his pocket, he cannot be voted out of his seat on the board. A company filing earlier this year showed that he has 60% of Facebook’s voting rights. So why file to vote if the results are moot? Rhode Island State Treasurer Seth Magaziner explains, “This will allow us to force a conversation at the annual meeting, and from now until then in the court of public opinion.” A Facebook spokesman refused to comment. Further read at source: Reuters

In a latest move, advertisers are suing over the company allegedly cooking the books and not disclosing this miscalculation. And media people are fuming about this development.

All this, it turns out, was allegedly predicated on a miscalculation–inflated metrics that Facebook knew about long before the problem got fixed. The company, according to the lawsuit, adopted a “‘no PR’ strategy” to avoid admitting to this screw-up.

Facebook, for its part, denies that it ever knowingly reported false metrics.

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