Last week Facebook revealed a data breach affecting 30 million accounts and shares are down about 27% since July. These and other longer-term problems at Facebook have led several public pension funds to back a shareholder proposal to separate Mark Zuckerberg from at least one of his dual roles as CEO and Chairman of the board.
The Wall Street Journal explains though that the problem for the petitioners is Mr. Zuckerberg’s “lock on the bulk of Facebook’s supervoting shares, each of which gives him 10 times the votes of average shareholders. According to Facebook’s latest proxy, his share of the voting power among Facebook investors was 59.9%.”
This structure, favored by start-ups, is a foul ball from the beginning. As Lord Zuck will tell you, “all shares are not created equal.” The issue I have with this is that public pensions are piling on Mr. Zuckerberg demanding he step down from the board. Once again, pensions are proving they put a wet finger in the air to determine public opinion and act accordingly. Now they can say they tried to do something. It’s a little late once they’ve already invested retiree money in a company they knew had corporate governance issues.
Originally posted on Yoursurvivalguy.com.