Several major Facebook shareholders have submitted a proposal calling for CEO Mark Zuckerberg to step down as chairman of the company’s board. The filing is mainly symbolic, since Zuckerberg has almost total voting control, an arrangement that has earned the company’s board structure comparisons to a “dictatorship.” The proposal is still noteworthy, however, because of the investors involved.
The pension funds of New York City are joining activist shareholder Trillium Asset Management, which has wanted to remove Zuckerberg as Facebook’s chairman since its disappointing second-quarter earnings report in July, as well as the state treasurers of Rhode Island, Illinois, and Pennsylvania. The proposal will be voted on at Facebook’s shareholder meeting next year.
In an online statement, New York City comptroller Scott Stringer called on Facebook’s board to make its chair an independent position.
“Facebook plays an outsized role in our society and economy. They have a social and financial responsibility to be transparent—that’s why we’re demanding independence and accountability in the company’s boardroom. 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 country, its shareholders, and ultimately the hard-earned pensions of thousands of New York City workers,” Stringer said. “An independent board chair is essential to moving Facebook forward from this mess, and to reestablish trust with Americans and investors alike.”
The shareholder proposal was filed by the New York City Pension Funds, Illinois state treasurer Michael Frerichs, Rhode Island state treasurer Seth Magaziner, Pennsylvania treasurer Joe Torsella, and Trillium Asset Management.
Stringer, a Democrat who serves as fiduciary for the city’s five public pension funds, which are worth about $160 billion in total assets, has been a vocal critic of Facebook. In March, he asked Facebook’s lead independent director, Dr. Susan Desmond-Hellmann, to improve the company’s data privacy accountability after the Cambridge Analytica scandal, citing the 4.9 million Class A shares held by the city’s pension funds.
Another proposal to replace Zuckerberg as chairman was filed in April before his Senate testimony about Cambridge Analytica’s misuse of Facebook user data.
Facebook declined to comment.