BOSTON – A wide majority of outside investors at Facebook Inc. backed a measure that would revamp its voting structure and end the super-voting rights of shares held by Mark Zuckerberg and others, seen as a rebuke to the chief executive of the world’s largest social media company.
The measure did not pass, said Facebook, which released tallies indicating the result on Tuesday, and where Zuckerberg controls about 60 percent of the company’s votes. The company is under scrutiny over its response to data privacy concerns.
Dayna Harris, a partner at compensation consulting firm Farient Advisors, said, “There are a lot of outside voters who are not happy with what’s going on there”.
Facebook commented that roughly 1.29 billion votes were cast “for” a proposal that would have the company move to a structure of one vote per share and do away with the supermajority shares, while 4.74 billion shares were voted were cast “against” the proposal.
Harris said, “Setting aside roughly 4.48 billion votes controlled by Zuckerberg and other insiders as of April that presumably would have been voted against the proposal, about 83 percent of shares voted by outsiders supported the proposal – a higher level of support than shareholder measures usually receive”.
Harris calculated with similar method resulting that Zuckerberg received support from only about 65 percent of investors which was much lower than the usual 90-percent-plus support directors receive at big U.S. companies.
Facebook Chief Operating Officer, Shery Sandberg also received a similarly low level of support from the outsiders.
shareholder proposal on previous year’s Facebook annual meeting received a huge level of support, also with opposition to Zuckerberg and Sandberg was also comparable in AGM.
Charles Elson, a professor at the University of Delaware who follows corporate governance, said “the results show big investors are unhappy but stuck with Facebook’s voting structure”, he also added, “People are upset, but there’s nothing they can do about it”.
Facebook has been facing scrutiny from shareholders and regulators after being failed to protect the data of 87 million users that has been shared with now-defunct political data firm Cambridge Analytica.
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