On Thursday, May 31, 2018, Facebook, Inc. (NASDAQ: FB) had its annual shareholder meeting and many investors came angered and frustrated over the recent scandals Facebook has been having. The meeting when from a dull gathering into a chance for investors to confront and question Facebook’s executives. According to Hannah Kuchler via Twitter Inc (NYSE: TWTR), “Facebook’s annual meeting feels like a revolt: nowhere else do the board and management get this kind of criticism even in the media”. During the meeting, investors pounded CEO Mark Zuckerberg with questions about his leadership, power of the company and management of the Cambridge Analytica data-harvesting scandal. One investor told Zuckerberg “Emulate George Washington, not Vladimir Putin” signifying to Washington’s verdict to step down as president.
Voting power in Facebook is still controlled by Zuckerberg and his executive members, which makes it almost impossible to pass any shareholders proposals unless Zuckerberg “blesses” them. On Thursday, all six shareholders proposals were rejected. During the election of board members, one woman advised shareholders to vote down to Zuckerberg’s re-election as CEO to the board. Regardless of the woman’s interruption, all eight members of the board, including Zuckerberg, were re-elected. Another shareholder proposal about giving everyone one vote per share which would prevent Zuckerberg of his unique voting rights, was voted down.
Another big concern from shareholders is Facebook’s handling of the Cambridge Analytica scandal. Christine Jantz, chief investment officer at NorthStar Asset Management said “If privacy is a human right, as stated by Microsoft’s CEO, then we contend that Facebook’s poor stewardship of user data is tantamount to a human rights violation”. Zuckerberg’s respond to this is that Facebook has not taken a “broad enough view” of its responsibilities. He also declared changes such as more simplicity in ads and increased spending on security. Although there were many criticisms towards Facebook, Facebook COO, Sheryl Sandberg, proposed one change the company is implementing to manage the company and it is the adoption of the “Rooney Rule”. This rule originated from the NFL and it requires that at least one minority candidate must be interviewed for a head coach or general manager position. Sandberg states that Facebook will use this rule when interviewing future candidates for Facebook’s board of directors.