Unfriending Zuckerberg: State treasurer seeks Facebook chair’s ouster
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Illinois Treasurer Mike Frerichs is no friend of Facebook founder Mark Zuckerberg.
The treasurer has joined officials from three other states in trying to force Zuckerberg out of his position as chair of the company’s board, citing the company’s handling of a string of scandals.
It’s the second time the Illinois Democrat has called for the social media giant’s ouster.
Frerichs joined state treasurers from Pennsylvania and Rhode Island and New York City’s comptroller in signing on to a June shareholder proposal from Trillium Asset Management, a company that seeks to promote good public policy through its investment decisions.
In a press release issued Wednesday, Frerichs accused Facebook of “missing, or mishandling” a laundry list of “severe controversies,” including Russian meddling in the presidential election, sharing users personal data with Cambridge Analytica and “proliferating fake news.”
Also cited were advertising options that allowed sellers to avoid racial minorities and the role of Facebook “propagating violence in Myanmar, India and South Sudan.”
Zuckerberg needed to be held accountable for his performance in order to protect the value of Illinois’s investment, Frerichs said.
Illinois’s state treasurer invests about $28 billion on behalf of the state, college funds for Illinois students, and local governments. As of August 2018, funds under his control owned $33.5 million worth of Facebook stock.
The proposal would allow Zuckerberg to continue serving as CEO, under the oversight of an independent chair.
“Facebook’s governance structure continues to put its investors at risk,” Frerichs said in the release. “Now is the time for change.”
Frerichs backed a similar proposal in 2017. Facebook, which declined to comment for this story, opposed that proposal.
“We do not believe that requiring the Chairman to be independent will provide appreciably better direction and performance, and instead could cause uncertainty, confusion, and inefficiency in board and management function and relations,” Facebook wrote in a message to investors at the time.
That proposal was voted down. Any effort to curtail Zuckerberg’s control over Facebook has to contend with the company’s two-tier share structure, which gives Zuckerberg and other insiders a majority of votes in shareholder decision-making.
“I think that the only sure-fire way to make sure nothing changes is to do nothing,” Frerichs said about his new effort, adding that even failed attempts to reform Facebook’s corporate governance could help build support for the cause.
Joining Frerichs in the proposal to make the Facebook chairman an independent position were Rhode Island State Treasurer Seth Magaziner, Pennsylvania Treasurer Joe Torsella, and New York City Comptroller Scott Stringer, according to the release.