Investors also slammed the tech juggernaut for its barrage of data-breach scandals, which they say has eroded public trust in the social network.
A group of shareholders made the bombshell revelations in an April 12 SEC filing. The proposals were made in preparation for Facebook’s annual shareholders meeting, which is scheduled for May 30.
Facebook unwittingly confirmed that it does indeed “operate essentially as a dictatorship” when it flatly rejected all eight shareholder proposals.
In their first proposal, shareholders called for Zuckerberg to be replaced by an independent chair. They claim that Zuckerberg — who has been chairman since 2012 — wields too much power over the company as its controlling shareholder, chairman, and CEO.
“His dual-class shareholdings give him approximately 60% of Facebook’s voting shares, leaving the board — even with a lead independent director — with only a limited ability to check Mr. Zuckerberg’s power…We believe this weakens Facebook’s governance and oversight of management.”
Facebook responded by vigorously defending Mark Zuckerberg and rejecting the shareholder proposal to oust him.
The board claims that the most effective leadership model involves Zuckerberg serving as both chairman and CEO.
“We do not believe that requiring the Chair to be independent will provide appreciably better direction and performance, and instead could cause inefficiency in board and management function and relations.”
Accordingly, the board asked for Facebook to compile a “Content Governance Report” detailing what steps it’s taking to prevent future data breaches. “Pew Research found 44% of young Americans have deleted the Facebook app from their phones in the past year, and 74% of users have either deleted the app, taken a break from checking the platform, or adjusted privacy settings.”