Tech

Mark Zuckerberg Isn't Going Anywhere, Shareholders Hold No Power Over Facebook CEO

By Mae Cervantes , Feb 10, 2017 10:15 AM EST
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Facebook CEO, Mark Zuckerberg, is under assault from the group of investors attempting to remove him as chairman for Facebook. Zuckerberg has been on the board since 2012 and just recently, the group of shareholders is asking for a change in management in the social media giant.

'SumOfUs' Point Of View

A group of shareholders known as "SumOfUs" stated a proposal that the company needs a change in balancing of power between the CEO and the board. The team revealed that the company needs a strong board leadership, which owns the responsibility to the serious issues such as fake news, online harassment and hate speech.

The proposal also pointed out that independent committee administration is distressfully required at Facebook taking after the board's choice in 2016 to support another capital structure, which lessened the privileges of "Class A" shareholders without the need for a dominant part vote of those shareholders.

The group unveiled the issue that Zuckerberg could bring about enormous problems to the company. However, one of the Associate Professor of Management and Operations at New York University, Robert Salmon, said that shareholders bought the stock and allowed control to Zuckerberg. The CEO has no obligation to do anything with the nonprofit organization and its claims.

Shareholders Own No Power

According to Mashable, Facebook has two types of shares, which one counts as ten votes and the other as one vote. The CEO has control over the 57 percent of the voting power, which means the rest of the shareholders are under the monitoring and order of Zuckerberg. Thus, the decisions will still be made by him.

Having somebody fill in as both CEO and director is not strange for organizations. Tesla, Amazon, Netflix, IBM and different organizations have one individual for both positions. Additionally, it will be difficult to get Zuckerberg off the governing body, since he is one of the greatest shareholders and could strike down the proposition effectively with different financial specialists.

 

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