Social Networking Giant Facebook (NASDAQ: FB) will hold its annual shareholder meeting on May 30. In advance of the meeting, Facebook has published its proxy statement, in which the proposals are described to vote. The company has been confronted with growing investor turmoil in recent years due to numerous scandals, and there are the usual – and futile – calls from CEO Mark Zuckerberg to voluntarily renounce his majority.
However, in an astonishing turn A shareholder proposal is about breaking up Facebook. Some politicians have been arguing this argument for months, and it seems that some shareholders agree.
Separation Is Difficult
Inc. ("Facebook") requested that the board of directors initiate an orderly process that requires consultants to consider strategic alternatives and empower a committee of independent directors to consider these alternatives In the exercise of their fiduciary duties to evaluate to maximize the value of shareholders, "reads the proposal reads.
Facebook has grown exponentially over the years and has built incredible market share and power, which have led to the company being dissolved The management's response to the ongoing crises appeared "uninformed" according to the supporting statement of the proposal. "It seems that Facebook is too big and too complex to manage effectively," the submitting shareholder writes notes that the controversy has weighed on the share price of Facebook, which in the first e lf months of 2018 has lost about 24% in value. Consumer confidence in the company has also declined.
In order to maximize the value of shareholders, the proposal suggests asking Facebook to consider the redemption of Zuck's excess Class B shares and / or the "sale of one or more subsidiaries".
Facebook fires back
Of course, Facebook rejects the proposal and the board recommends voting against its shareholders. The board of directors argues that under Zuckerberg's leadership, the company has "created a track record of value creation for our shareholders and the management of key opportunities and challenges." Facebook says it now focuses on overcoming key social issues, building new experiences, supporting third-party companies that rely on Facebook, and more transparent communication.
There is no possible way to pass the proposal, as Zuck will be considered single – voted to vote. While the young chief executive has sold some of his shares to fund his philanthropic efforts, he still holds 53% of the voting rights. By including co-founder Dustin Moskovitz, whom Zuckerberg had secured years ago from an irrevocable proxy, His Zuckness's overall voting power increased to 57.7%.
If Facebook ever breaks, it wins. It's from a shareholder proposal. The action would have to come from government officials or regulators.