Four leading U.S public funds holding shares in social media giant Facebook Inc co-filed a proposal to remove CEO Mark Zuckerberg as the company’s chairman on Wednesday. In 2017, shareholder Trillium Asset Management filed the proposal for an independent chair but was defeated due to Zuckerberg majority control.
Following data privacy scandals associated with Facebook, State treasurers from Rhode Island, Illinois, and Pennsylvania together with the New York City Comptroller Scott Stringer joined the original filer and hoped to earn support from other larger asset managers.
According to Seth Magaziner, State Treasurer of Rhode Island, the latest proposal is still noteworthy and would be a way to draw attention to Facebook’s recent scandals and how to comply them. As reported in Reuters, the state treasurers said that this will force a conservation in annual meeting and then in the court of public opinion.
A Facebook spokesperson declined to request for comment on the recent proposal. The 2017 resolution was supported by at least three to four shareholder while the current proposal is set to be voted in May 2019 at Facebook’s annual shareholder meeting. The shareholders seek to create an independent board chair to improve oversight, citing Facebook’s controversies that affected its reputation including fake news proliferation, unauthorized sharing of user information, and massive Cambridge Analytica scandal involved in the U.S. elections.
In an interview, Michael Frerichs, Illinois State Treasurer said that an independent board chair might not have solved all the issues but the problems would have been fewer and prevented the tumbling of share price at Facebook.
According to Reuters news, shares of the social network company have had a rocky year, due to pressure from operational issues, revelations of user information along with growing concerns over slowing revenue growth. On Wednesday, the shares closed at $159.42, 10% lower than at the start of the year.
In the 2017 proposal, Facebook’s largest investors, Fidelity Contrafund and the Vanguard Total Stock Market Index Fund voted against it while it earned backing from American Funds Growth Fund of America.
Spokespeople of the two major investors as well as American Funds representatives refused to comment. Among the four public funds that co-filed the proposal, the New York City Pension Funds held about 4.5 million shares of Facebook while the original filer, Trillium owned 53,000 shares as of July 31. According to a spokesperson, the Pennsylvania Treasury owned 38,737 Facebook shares as of August. The Illinois Treasury and Rhode Island Funds held 190,712 and 168,230 shares respectively.