Facebook stakeholders have shared some stunning revelations about Mark Zuckerberg, the social media giant’s CEO, and his position of power. In an SEC filing, the shareholders state that Facebook is a dictatorship and the majority of the control over the company rested with Mark Zuckerberg.
“Mark Zuckerberg is able to exercise voting rights with respect to a majority of the voting power of our outstanding capital stock and therefore has the ability to control the outcome of matters submitted to our stockholders for approval. In addition, Mr. Zuckerberg has the ability to control the management and major strategic investments of our company as a result of his position as our CEO and his ability to control the election or replacement of our directors. Mr. Zuckerberg is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally,” quoted the filing.
Zuckerberg currently controls 51% of the votes even though he owns only 31% of the economic value of the firm. His dual class shareholdings give him the right to 60% of the voting shares. This limits the power of the independent director to keep a check on his power.
“We believe this weakens Facebook’s governance and oversight of management. Selecting an independent Chair would free the CEO to focus on managing the Company and enable the Chairperson to focus on oversight and strategic guidance,” argued the stakeholders.
They further alleged that the lack of independent board chair and oversight has led to Facebook mishandling numerous controversies like Russian meddling in the U.S. elections, fake news and Cambridge Analytica scandal.
This is not the first time that Facebook stakeholders have expressed concerns regarding the power held by Zuckerberg within the company. In 2017 shareholder submitted a similar proposal. However, the Facebook board defended the CEO stating that it was in the company’s best interests that he remains as both CEO and chairman of the company.
Image via Shutterstock