From the Mercury News' SiliconBeat:
A major California-based Facebook shareholder blasted the social networking giant’s power structure, arguing that the dual-class share structure grants CEO Mark Zuckerberg voting power that is “akin to a dictatorship.”
The California State Teachers’ Retirement System (Calstrs) said “it is time to act like an adult” for Facebook and Zuckerberg, in an op-ed in the Financial Times on Thursday. The group proposed ending the dual-class share structure, in which special “Class B” shares owned mostly by Zuckerberg have 10 times the voting power as regular “Class A” shares. “Why does Mr Zuckerberg need the entrenchment factor of a dual-class structure?” wrote Aeisha Mastagni, a portfolio manager at Calstrs. “Is it because he does not want governance to evolve with the rest of his company? If so, this American dream is now akin to a dictatorship.”
According to Facebook’s most recent proxy statement to the Securities and Exchange Commission last month, Zuckerberg owns less than 1 percent of Class A shares, which have one vote per share. But he owns 89 percent of Class B shares, which have 10 votes per share. In total, Zuckberg has 59.9 percent of all voting power in Facebook, giving him majority voting power to quash any activist shareholder proposal.
Calstrs owns $825 million worth of Facebook shares, according to the Washington Post. With a portfolio of $220 billion, the majority of which are in passive index funds, Calstrs owns huge shares in other Silicon Valley companies, including $1.9 billion in Apple shares.
Calstrs is the latest Facebook investor asking for reform, following comments from Illinois state treasurer Michael Frerichs and New York City comptroller Scott Stringer. Stringer in particular demanded Zuckerberg resign as Facebook CEO last month amid the Cambridge Analytica fallout.
Before its annual shareholders meeting in Menlo Park on May 31, Facebook shareholders sought to bridge the power gap between themselves and Zuckerberg in two proposals. The proposals sought to make all shares have one vote and make all voting proposals decided by a simple majority vote, respectively.Of course CalSTRS could always sell the greatly appreciated shares.
Facebook opposed both, saying they “believe that our success is due in large part to the leadership” by Zuckerberg. They also noted similar proposals have failed the past four years....MORE
"Surprise! Facebook Directors Weren't Villains" (FB)
Reminder: Uber Founders Have Super-voting Shares
Facebook's Investors Criticize Marc Andreessen for Conflict of Interest
"Marc Andreessen Has a Pretty Creepy Relationship With Zuck" (FB)
"Facebook investors yell at CEO: Get the Zuck out of our boardroom!" (FB)
Zuckerberg says he has no plans to run for president: report (FB)
Mr. Zuckerberg still has to resolve the shareholder lawsuit on his "Ya got it, ya sell it, ya still got it"* controlling shareholder plan, now, after discovery, with more Andreessen.
Then he's going on his 50-state "meeting people in small towns-2017 tour".
Then he has to talk with President Obama's campaign wizard David Plouffe about whether David is happy in his brand-new perch at the Chan-Zuckerberg Initiative.
Hell who knows, 2020 seems a long way off and right around the corner at the same time....
*I think the "...Got it, sell it, still got it" formulation is the punchline to "Why do Goldman bond salesmen envy hookers" or something, now used as voting control strategy in the Valley, see for example GOOG-GOOGL-GOOGLIEST (class B for Larry and Sergei with 10x votes).