Social networking giant Facebook (NASDAQ: FB) arranges its annual shareholder meeting on May 30. Until the collection, Facebook has issued a power of attorney, which describes the proposals that come up for a vote. The company has already faced increasing investor turmoil in recent years due to myriad scandals, and it is commonplace – and useless – requiring CEO Mark Zuckerberg to voluntarily renounce his majority power.
However, in a fantastic turn of events, a stockholder proposal goes as far as calling for Facebook to be broken up. Some politicians have made that argument for several months, and some shareholders seem to agree.
It is difficult to break up
"Shareholders in Facebook, Inc. (" Facebook ") request that the board begin an orderly process to retain advisors to study strategic options and allow a selection of independent directors to To evaluate these options in the exercise of its fiduciary responsibility to maximize shareholder value, "the proposal reads.
Facebook has grown exponentially over the years and accumulated incredible market share and power, leading companies to break up. Management's response to the ongoing crises has been "uninformed", according to the proposal's statement of support. "Facebook seems to be too large and complex to be managed effectively," filing shareholder writes. The proposal notes that the controversy has weighed on Facebook's share price, which lost about 24% of the value in the first 11 months of 2018. Consumer confidence in the company has also declined.
In order to maximize shareholder value, the proposal encourages Facebook to consider canceling Zuck's monitoring of B shares and / or "sale of one or more subsidiaries."
Facebook burns back
Of course, Facebook contradicts the proposal, and the board recommends that shareholders vote against it. The board claims that under Zuckerberg's management, the company "has established an overview of creating value for our shareholders and navigating important opportunities and challenges." Facebook says it is now focused on addressing major social issues facing the company, building new experiences, supporting third-party businesses that rely on Facebook, and communicating more transparently.
There is no possible way the proposal will pass, as Zuck will simply-vote it down. While the young CEO has sold some of his efforts to fund his philanthropic efforts, he still has 53% voting power. When he included co-founder Dustin Moskovitz shares, which Zuckerberg secured irrevocably voting over as part of a settlement year, Hans Zuckness's total voting power increases to 57.7%.
If Facebook is to be broken up, it won & # 39; Not from a shareholder proposal. The act had to come from government officials or regulators.