Social networking giant Facebook (NASDAQ: FB) will host its annual shareholder meeting on May 30. Before the meeting, Facebook released its proxy statement, proposals that will come up for a vote. The company is facing increasing investor hustle over the years because of many scandals, and there are common – and futile – calls for CEO Mark Zuckerberg to voluntarily restore his power by most voting.
However, in a spectacular turn of events, a stockholder's proposal goes up to call Facebook to be switched. Some politicians have made this argument for months now, and it seems that some shareholders agree.
Breaking up hard work
"Shareholders of Facebook, The board of directors requested a proper process of maintaining consultants to study strategic alternatives and empower a committee of independent directors to study alternatives to using their fiduciary responsibilities to maximize shareholder value, "the proposition reads.
Facebook grew substantially over the years and accumulated incredible market and power distribution, which led to calls for the damaged company. The response to the management of the ongoing crisis seems "unknown," according to the measure's support. "It appears that Facebook may be too big and complex to effectively manage," the shareholder's submission writes. The measure indicates that controversies weighed on the share price of Facebook, which lost almost 24% of its value in the first 11 months of 2018. Consumer confidence in the company also fell.
To maximize shareholder value, the proposal calls for Facebook to consider the cancellation of Zuck's superb Class B components and / or the "sale of one or more subsidiaries. "
Facebook fires back
Of course, Facebook is in conflict with the proposal and the board of directors has recommended that shareholders vote against it. The board declares under Zuckerberg's leadership, the company "promotes track record of creating value for our stockholders and navigating important opportunities and challenges." Facebook says today focuses on addressing key social-facing issues with the company, developing new experiences, supporting third-party businesses that rely on Facebook, and more explicitly speaking.
There is no way to pass the proposal, as Zuck's one-handedly drops it down. While the young executive sold some of his stake to fund his philanthropic efforts, he still has 53% voting power. With Dustin Moskovitz's leading founder, Zuckerberg assured that the proxy voting can not be recovered as part of a year of settlement, the total voting power of His Zuckness rose to 57.7%.
If Facebook is always broken, comes from a shareholder's proposal. The action should come from government officials or regulators.