Facebook CEO Mark Zuckerberg will remain as chairman after a shareholder vote to curtail his power failed.
The proposal, voted down at Facebook’s annual shareholder meeting on Thursday by an undisclosed margin, required that Facebook appoint an independent chair to replace Zuckerberg. Critics had pushed for the vote following a string of controversies at the social media giant including privacy snafus, use of its service by to spread disinformation, and a lack of independent oversight.
The actual result at the meeting was foregone conclusion. Zuckerberg controls the majority of votes and is in no mood to loosen his stranglehold over the company that he co-founded.
But he did have to face withering criticism during the meeting when Arjuna Capital’s managing partner Natasha Lamb asked whether he would be willing to step down as chairman. Instead of answering directly, he dodged the question by talking about the need for governmental regulation.
“The big question we need to answer is what is the right framework that will enable us to solve certain issues we’re grappling with,” Zuckerberg said.
When Lamb repeated her question, the moderator told her she had already asked one and then turned to someone else. But the issue wouldn’t die.
Another audience member asked Susan Desmond-Helmann, Facebook’s lead independent director, if she would call for an executive session about handing Zuckerberg’s chairman’s role to someone else.
“The answer is no,” she responded. “The company and I and the board of directors are comfortable with the current operating arrangement, where Mark is chairman and CEO.”
In a letter to shareholders in April, Trillium Asset Management backed the proposal against Zuckerberg, saying that Facebook’s board “has repeatedly appeared absent or unable to provide the oversight and accountability necessary” at this time. It also said that having a lead independent director was insufficient.
“Let us not miss this opportunity to make a simple yet powerful change that will go a long way to creating a successful future,” Jonas Kron, Trillium’s senior vice president, said at Thursday’s meeting.
Activist groups Change of Color and Majority Action also asked shareholders to vote against Zuckerberg. The groups cited key executive departures like that of chief product officer Chris Cox, Facebook’s failure to stop the spread of hate and misinformation, and privacy concerns.
The organizations also encouraged shareholders to support separate proposals that would have given shareholders with equal voting power to board directors and require Facebook to provide more details about subjects like its gender pay gap and business structure. Those proposals also failed.
This isn’t the first time shareholders have voted on removing Zuckerberg as chairman. In 2017, a group of shareholders suggested that Zuckerberg had too much power and that the company needed an independent chair to keep him in check.
That proposal failed.
Trillium knew that the shareholders’ votes were unlikely to change anything this time around either, but it hoped to send a message to Facebook, nonetheless.
“Results showing even 30% or 40% of outsider shares supporting an independent board chair will send a powerful message to leadership that must be taken seriously,” Trillium said in a letter it sent to shareholders in April in an effort to win their votes.