By Spencer Feingold
Facebook founder Mark Zuckerberg faces a growing challenge to his power after 68 percent of outside investors voted last week to separate the role of board chair and CEO — both of which are held by Zuckerberg.
The proposal for a vote was submitted in October of last year by New York City Comptroller Scott Stringer, who heads the city's Retirement Systems, which owns roughly $785 million of Facebook's stocks.
"As the comptroller, the fiduciary of a pension fund, I represent firefighters, teachers, and city workers. We want the companies we invest in to do well. So this is not about bringing down Facebook, it is actually making the company stronger for the long run," Stringer told Cheddar in an interview Wednesday.
The vote, however, is largely symbolic since Zuckerberg's majority stack means he can overrule any proposal be disagrees with. In other words, Zuckerberg will step aside when he deems fit.
Nevertheless, the 68 percent in favor of decoupling the board chair and CEO was an increase from the 51 percent that supported the proposal last year.
"We share owners want the board to take a very hard look at all the mistakes that have been made, all the governance questions that have been raised and now what we're seeing is a vote that keeps getting larger," Stringer said. "I believe separating the chair and CEO is critical for building a new, public, transparent foundation in the company."
Facebook ($FB) continues to face enormous public pressure following several high profile data breaches and mishandling in recent years, such as the Cambridge Analytica scandal during the 2016 presidential election. The company is also confronting increasingly empowered regulators in the U.S. and around the world. On Tuesday, the Federal Trade Commission announced that it will have jurisdiction over Facebook to monitor compliance and investigate antitrust concerns.
On Monday, the House Judiciary Committee also opened an antitrust investigation into major U.S. tech giants, which is likely to ensnare the likes of Facebook, Google ($GOOGL), and Amazon ($AMZN).
"After four decades of weak antitrust enforcement and judicial hostility to antitrust cases, it is vital for Congress to step in to determine whether existing laws are adequate to tackle abusive conduct by platform gatekeepers or if we need new legislation," Rep. David Cicilline (D-R.I.), the committee's antitrust subcommittee chairman, said in a statement.
Stringer added that the concerns of outside investors go beyond the company's bottom line.
"We have a big election coming up in 2020, and most Americans feel that for the first time we might not have a fair election and Facebook is at the center of that," he said.