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In battle for Silicon Valley’s destiny, shareholders strike back

September 24, 2017

By Thomas Lee : sfchronicle – excerpt

In the typically one-sided scrum between investors and superstar tech executives, shareholders have been showing more backbone of late.

First, there was the investor-led ouster of Uber co-founder Travis Kalanick, whose tenure as CEO was marked by a workplace culture of pervasive misconduct, sexual and otherwise.

Following Snap’s initial public offering, in which the company behind Snapchat sold stock to the public with no voting rights, S&P said it would no longer include companies with such stock structures in its benchmark indexes…

It was those very philanthropic ambitions that tripped up Zuckerberg and Facebook’s board of directors.

Last year, the board approved a plan that would allow Zuckerberg to financially support his social causes without relinquishing control over the company.

And now Facebook has scrapped a plan that would have allowed CEO Mark Zuckerberg to sell stock to fund his philanthropy without losing voting rights…

And given recent events, allowing Zuckerberg to run Facebook carte blanche was probably not a good idea.

Since Republican Donald Trump won the presidential election last year, Facebook has acknowledged that the social network promoted fake news stories attacking Democratic opponent Hillary Clinton. And the company recently disclosed that it sold political ads to people linked to the Russian government posing as pro-Trump Americans. Facebook has handed over data about the ads to federal and congressional investigators, and Congress might even call on Zuckerberg to testify.

Fortunately, some investors were seeking to hold Facebook to some level of accountability…

Zuckerberg said Friday that Facebook’s stock had become so valuable that he could fund his charities without worrying about giving up control. Think about that: If Facebook stock hadn’t done as well, would that have somehow made the plan more justifiable? Facebook’s decision to back down is unquestionably a big win for shareholders. Good corporate governance should apply to all companies, regardless of their success… (more)

Not mention good for voters who rely on news to not be fake.


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