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Facebook shareholders say Mark Zuckerberg holds too much power

But proposals to rein in the CEO's control over the company fail to pass. Perhaps not surprising given that Zuckerberg has majority voting power.

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Protesters from SumOfUs and Bend the Arc gather outside of Facebook's annual shareholder meeting at Hotel Nia in Menlo Park, California.

Queenie Wong/CNET

Facebook's long list of scandals has raised concerns, including from shareholders, that CEO Mark Zuckerberg wields too much power over the company.

The social network was used to spread fake news during elections, fuel hate speech in Myanmar and livestream killings. Facebook is also expecting to face a record $5 billion fine from the Federal Trade Commission for its alleged failures to protect user privacy.

On Thursday at the company's annual shareholders meeting, eight shareholder proposals, including some that attempted to rein in Zuckerberg's power, failed to pass. The results weren't surprising because Zuckerberg has the majority voting power over the company. That's because Zuckerberg, who's also chairman of Facebook's board of directors, owns a class of stock called Class B that has 10 votes per share.

One of the stockholder proposals would've required Facebook to select an independent board chair. Another would've eliminated Facebook's Class B shares.

Calls to curtail Zuckerberg's control over the company aren't new, but they've escalated as Facebook continues to be plagued by more problems, including issues around data privacy and security. Even one of Facebook's co-founders, Chris Hughes, has called for regulators to break up Facebook.

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Outside of the meeting at Hotel Nia in Menlo Park, California, a small group of protesters from advocacy groups SumOfUs and Bend the Arc held up a giant inflatable angry emoji along with signs that read "Break up Facebook" and "Vote no on Zuckerberg." Conservatives from another group, called Take California Back, came with a megaphone and alleged that the social network, which banned several far-right figures earlier this month, was censoring free speech.

A plane flew overhead displaying a sign that read, "Break up Facebook! Save Silicon Valley!" On Wednesday, nonprofit Fight for the Future projected a giant sign that read "Fire Mark Zuckerberg" on the side of Hotel Nia, according to a Medium post from the group.

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Fight for the Future projected a giant sign that read "Fire Mark Zuckerberg" on Hotel Nia on Wednesday night.

Fight for the Future

"We believe that Facebook is out of control," Arielle Cohen, a national organizer for Bend the Arc, said during the meeting on Thursday. "It is too large and too complex to be managed effectively."

The group put forward a proposal asking Facebook to look at "strategic alternatives," including splitting Instagram, WhatsApp and Oculus VR off from the company and eliminating Class B shares.

Zuckerberg signaled during the meeting that he didn't have plans to relinquish his control of the company but would continue pushing for more government regulation. 

"I think the big question that we need to answer is, What is the right framework?" he said.

Facebook stockholders rejected proposals on other topics, including one that asked Facebook to prepare a report on workforce diversity that includes information about what the company is doing to support employees "who do not share all or part of Silicon Valley's dominant political ideology."

Shareholders elected eight members to Facebook's board of directors, including PayPal executive Peggy Alford, who'll be the first African-American woman to join the board. Netflix CEO Reed Hastings, who's served on Facebook's board since 2011, wasn't nominated for re-election. Erskine Bowles, the president emeritus of the University of North Carolina, is also leaving the board.