- A second Facebook investor wants Mark Zuckerberg out as chairman.
- Zuckerberg controls Facebook thanks to the way the company's stock is structured, meaning he has final say on the future direction of the company.
- That's frustrating for activist investors who watched the Cambridge Analytica scandal wipe $60 billion off the firm's market cap over the past few weeks.
- Now is a golden opportunity for those investors to gang up and call for Zuckerberg to step down.
Mark Zuckerberg's Congressional grilling last week was a reminder that he is still in total control of Facebook.
Thanks to the firm's stock structure, its public investors — even those with $1 billion (£70 million) holdings — don't have much say on the company's future.
Facebook has two classes of shares. Class A shares trade under the "FB" ticker on public markets and come with one vote per share. Class B shares are only available to insiders and have 10 votes per share.
Zuckerberg owns lots of Class B stock, and therefore has 60% of the voting power. He's also Facebook's chairman. In other words, if he wants something to happen at Facebook, it happens.
Now that Zuckerberg and Facebook are under closer political scrutiny over the Cambridge Analytica data scandal, Facebook's powerless activist investors have picked an opportune time to criticise the firm's structure.
Illinois' treasurer is the latest investor to call for Zuckerberg to step down as chairman.
"In essence Mr Zuckerberg is not accountable to anyone," Michael Frerichs told the Financial Times. "Not the board, nor the shareholders. Right now, Mr Zuckerberg is his own boss and it’s clearly not working."
Frerichs oversees college savings funds for Illinois citizens, and is known for using the investments to pressure companies to do good. His holdings in Facebook are not clear.
What is certain, however, is that he's backing a plan by New York Comptroller Scott Stringer, who called for Zuckerberg to step down as chairman earlier this month.
Stringer — who supervises funds with an almost $1 billion stake in Facebook — wants an independent chairman and the addition of three new board members, with expertise in ethics and data privacy.
His argument is simple: The revelation that Cambridge Analytica syphoned off millions of users' data wiped $60 billion off Facebook's market cap. Zuckerberg's control of Facebook makes the stock vulnerable whenever he makes a major misstep — and that has big repercussions for anxious shareholders who are pretty powerless to do anything.
Zuckerberg won't give up control easily, if at all. He told Vox earlier this month: "One of the things that I feel really lucky we have is this company structure where, at the end of the day, it’s a controlled company.
"We are not at the whims of short-term shareholders. We can really design these products and decisions with what is going to be in the best interest of the community over time."
- Facebook is backing away from the campaign to kill California's proposed privacy law — right after Zuckerberg was grilled about its data collection practices
- Mark Zuckerberg's 2nd day of congressional grilling over user data and Facebook bias didn't go quite as smoothly as his first
- Facebook has gotten so big that no one can understand it, and it could be a good reason to break it up