Key Facebook investors join push to oust Mark Zuckerberg as chairman

The move comes after Facebook revealed hackers stole personal info from 29 million of its users.

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Mark Zuckerberg

Mark Zuckerberg

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Several state officials who manage public funds with holdings in Facebook want to see CEO Mark Zuckerberg out as chairman of the social network's board.

On Wednesday, the state treasurers of Rhode Island, Illinois and Pennsylvania, as well as the New York City comptroller, signed on as co-filers of a shareholder proposal that asks Facebook's board of directors to make the role of board chair an independent position, according to a release. The proposal was originally filed in June by investor Trillium Asset Management.

Facebook declined to comment.

The proposal is mostly symbolic. Zuckerberg has nearly 60 percent of voting power among shareholders thanks to his mass of supervoting shares. That class of stock is worth 10 times more voting power than a normal share.

Still, Wednesday's move casts light on recent doubts about Facebook's leadership. The call to install someone other than Zuckerberg as chairman, who co-founded the social network in his Harvard dorm room in 2004, suggests some powerful Facebook backers would like new direction at the company, especially after a slew of crises. 

The co-filing comes after Facebook revealed in September that hackers stole the personal info of 29 million people. The proposal and co-filing also highlight Facebook's "mishandling" of other recent incidents. The company is still reeling from Russian meddling in the US presidential election, as well as the Cambridge Analytica scandal, in which a UK-based consultancy harvested the information of 87 million Facebook users without their permission.

"Facebook's governance structure continues to put its investors at risk," Illinois State Treasurer Michael Frerichs said in the release. "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."

A similar proposal to appoint an independent chair was put forward last year but didn't pass. The new proposal is slated for a vote at Facebook's annual shareholder meeting in May 2019.

First published Oct. 17, 9:33 a.m. PT.
Update, 10:10 a.m.: Adds more background.

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