Business Insider: Investors are trying to remove Mark Zuckerberg as Facebook CEO

Facebook investors, who own $3 billion in company shares, are trying to remove Mark Zuckerberg from the position of CEO and change the company's management structure, Business Insider writes , citing six major shareholders of the social network. They say their concerns are at "unprecedented levels" after the recent Facebook scandals.

Details

• All of Business Insider's interlocutors agree that this is the first time investors have been so "angry" since Facebook's IPO in 2012. They have watched with frustration a series of scandals involving Facebook - allegations (indirect) of interference in the presidential elections and the leakage of data of millions of users to Cambrigde Analytica.
• The "rebellious" investors blame Mark Zuckerberg and Facebook's management system for the problems, in which they have no control over his activities. “We have doubts about the company’s governance structure, it can lead to risks – reputational, regulatory and other,” said New York City Financial Comptroller Scott Stringer, who has previously spoken out in favor of Zuckerberg’s resignation . Stringer has reason to worry - the city's pension funds have invested about $1 billion in Facebook stock. He's his own boss, and it's obviously not working,” agrees Michael Frihisch, who has invested about $35 million in the company.
• The two top investors' demands are Zuckerberg stepping down as CEO and lifting the dual ownership structure that gives Zuckerberg and his team too much power.
• Facebook shares are divided into Class A and Class B shares. The voice of a Class B security is 10 times stronger than Class A shares. Zuckerberg owns more than 75% of B shares and has almost complete control over the company, explains BI.
• Zuckerberg's critics voted for these changes at the last two Facebook investor meetings. However, their offer was rejected several times, as Zuckerberg and loyal employees own shares that give the right to more votes, the publication explains.
• A Facebook spokesman declined to comment on investor dissatisfaction, but pointed to previous statements from the company that said it had a "suitable" governance structure.

Context

• Facebook is accused of insufficient control over the "Russian trolls" who allegedly threw in political ads during the presidential campaign in the United States. In the spring, the social network experienced another scandal - the data leakage of 87 million users to Cambrigde Analytica, whose services were used by Donald Trump's political strategists. The company has not yet been able to determine where much of the data has gone .
• Immediately after the scandal, turned their backs colleagues in Silicon Valley, including Tim Cook and Elon Musk, on Zuckerberg. Many celebrities have joined the Delete Facebook campaign, including one of the founders of WhatsApp (Facebook bought the messenger in 2014 for $22 billion) Brian Acton. Following him, another founder of WhatsApp, Jan Kum, left Facebook. We talked about the reasons for their conflict with Zuckerberg here .
• Despite all the problems, Zuckerberg did not resign and promised to correct his own "huge mistakes". If we talk about capitalization, which in the first days after information about the leak collapsed by $ 50 billion, then Facebook took less than two months to recover from the scandal - in May, the company's value returned to pre-crisis levels .
• How Facebook has been managed in the last two years - you can read in detail in the Wired material (although it is paid).

What do I get from this?

Any company goes through crisis situations, but it is not always possible to avoid fatal mistakes. A series of scandals around Facebook allows us to analyze what exactly the company's management did wrong at first. And this experience can be useful, no matter what business you are in. And here is a selection of the best books on crisis management from the Alpina publishing house.

Artem Gubenko