New York City Comptroller Scott Stringer and the state treasurers of Rhode Island, Illinois and Pennsylvania made some noise this week in proposing Facebook remove Mark Zuckerberg as chairman. But experts say that’s all the proposal amounts to—”noise.”
The public funds have holdings in Facebook and join another shareholder proposal, from Trillium Asset Management, which suggested the same thing back in June. According to The Wall Street Journal, Zuckerberg’s share of the voting power among Facebook investors is nearly 60%, which means these proposals have no chance of actually getting passed.
The proposal comes after Facebook has dealt with a number of controversies, including the spreading of misinformation in political campaigns and a data breach impacting 30 million users.
“We need Facebook’s insular boardroom to make a serious commitment to addressing real risks — reputational, regulatory, and the risk to our democracy — that impact the company, its share owners, and ultimately the hard-earned pensions of thousands of New York City workers,” New York City Comptroller Scott Stringer said in a statement.
TK Kerstetter, Corporate Board Member’s Editor-at-Large and the CEO of Boadroom Resources, says the group knows it’s can’t do anything legally to remove Zuckerberg as chairman, but likely wanted to send a message anyway.
“There have been some slipups at Facebook, the board should be aware that shareholders are concerned,” he says. “Noise like this, sometimes it goes nowhere. Sometimes it hits a nerve and the board gives it consideration. I don’t see anything happening, or the board even acknowledging the response.”
The reality, Kerstetter says, is that even in cases where there isn’t someone holding a supermajority of the shareholder votes (as Zuckerberg does at Facebook), these kinds of gestures are largely to be considered “noise” by boards and nothing else. “Everyone is hoping that there is a board that will put some pressure on, but history shows that it rarely happens,” he says.
The proposal will be voted on in the next Facebook shareholder meeting, held in 2019.
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