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Pension fund officials in four states want Facebook CEO Mark Zuckerberg removed as chairman

Pension fund officials in four states want Facebook CEO Mark Zuckerberg removed as chairman
Facebook Chairman and CEO Mark Zuckerberg makes the keynote speech at Facebook's developer conference on May 1 in San Jose. (Marcio Jose Sanchez / Associated Press)

Public officials in four states say they want Facebook to have an independent board chair, effectively calling for the removal of Chief Executive Mark Zuckerberg as chairman due to the social media company’s recent scandals.

The state treasurers of Illinois, Rhode Island and Pennsylvania, along with the city comptroller of New York, signed on to a shareholder proposal originally filed by investor Trillium Asset Management in June. They argue that separating Facebook’s chairman and CEO roles is “in the best interest of shareholders, employees, users, and our democracy.”

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The public officials are bringing the proposal in their capacity as overseers of various pension funds that own Facebook stock.

However, Facebook shareholders voted down a similar proposal last year calling for an independent chair. The proposal received 765 million votes in favor — and 5.4 billion votes against. This new proposal will almost certainly suffer the same fate, given that Zuckerberg, between his own holdings and voting-rights agreements, holds about 60% of Facebook’s shareholder votes.

Facebook declined to comment, except to cite its response to the prior proposal in which it said that it did not believe an independent chairman would “provide appreciably better direction and performance, and instead could cause uncertainty, confusion, and inefficiency in board and management function and relations.”

A statement from Illinois Treasurer Michael Frerichs cited a bevy of problems at the company, including a recent data breach affecting 30 million users and its sharing of data with Cambridge Analytica.

His statement also calls out the Menlo Park, Calif., company for spreading fake news, helping spread violence in Myanmar and other countries and contributing to depression and other mental health problems.

“Facebook’s governance structure continues to put its investors at risk,” Frerichs said in Wednesday’s statement. “Now is the time for change. We need to see more accountability of Mark Zuckerberg to the board of directors to restore investor confidence and protect shareholder value.”

Pennsylvania Treasurer Joe Torsella said Zuckerberg has amassed “unchecked corporate power” and needs to be reined in.

“Boards of directors should be a check on management teams, not a tool of them, and an independent chair is essential to achieving that result,” he said.

11 a.m.: This article was updated with Facebook’s response to the proposal.

This article was originally published at 10:45 a.m.

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