Meta shareholders slam Zuckerberg, question ‘dystopian downsides’

A group of angry shareholders say Mark Zuckerberg’s weak leadership has sent Meta shares down 34% this year – and they plan to push for the CEO’s power to be checked, The Post has learned.

Worried investors are pushing two resolutions at the social media titan’s upcoming shareholder meeting that they say would provide much-needed oversight of Facebook, Instagram and the potential “dystopian downsides” of Mark Zuckerberg’s metaverse project.

In an effort to drum up support, a corporate responsibility group called SumOfUs that works with activist investors is sending a report to more than 4,000 institutional investors with stakes in the company, including Vanguard, Fidelity and BlackRock.

The scathing report, which was obtained exclusively by The Post, describes three crises “engulfing” Zuckerberg’s business: privacy restrictions by Google and Apple that have battered Meta’s advertising business, the storm of antitrust lawsuits and bills targeting Meta and other big tech companies, as well as allegations that Zuckerberg lied to investors and lawmakers about Instagram’s harmful effects on teens.

The group blames the crises squarely on Zuckerberg, who they say has failed to prove that his recent adoption of the metaverse is anything other than a “hasty attempt to distract from fundamental issues with the core business of Meta”.

Christina O’Connell, shareholder engagement adviser at SumOfUs, told the Post that Meta’s stock price plunge should wake up investors.

Shareholders are concerned about the “dystopian downsides” of Mark Zuckerberg’s metaverse project.

“When you see a loss of over $230 billion in February, it shakes everyone up, and that should be a sign that it’s time for a change,” O’Connell said.

The first resolution, which SumOfUs is pushing alongside shareholders Harrington Investments and the Park Foundation, calls for an external assessment of Meta’s Audit and Risk Oversight Committee, a board created by the company in 2020 that is supposed to be independent from Zuckerberg and makes decisions on content moderation issues. like the banning of Facebook and Instagram by former President Donald Trump.

“There’s a real concern that given the amount of issues we’ve seen with the business, that the committee isn’t managing the behavior and performance of the business very well,” O’Connell said. “We would like to see an independent analysis of the workings of this committee.”

The second resolution sounds the alarm about the “potential harm to psychological, civil, and human rights” associated with Zuckerberg’s metaverse push.

The proposal is backed by SumOfUs alongside responsible investment fund Arjuna Capital, investor advisory group SHARE and Storebrand, a Norwegian asset manager that manages more than $100 billion.

The groups want Meta to commission an external audit of the metaverse’s potential risks — such as the potential for harassment and hate speech, as well as privacy concerns — and then demand a shareholder vote to assess whether investors support the project.

“Meta hasn’t been able to deal with their issues here now in the world we all live in, so it’s quite shocking that they want to move to a more complex platform such as the metaverse,” O’ said. Connell. “Deaths to children, bullying, hate speech – it all amplifies as you start entering the metaverse.”

Mark Zuckerberg
Mark Zuckerberg can effectively veto shareholder resolutions because of his “watchdog” actions.
Getty Images for SXSW

Meta’s board urged shareholders to vote against both resolutions, calling them “unnecessary.”

Meta’s unconventional ownership structure allows Zuckerberg to veto any shareholder attempt to change the company’s operations. His stake in Meta is made up largely of “supervisory” shares, giving him control of about 58% of the votes when the company considers shareholder proposals.

Nonetheless, O’Connell argues that shareholder action is still one of the best ways to get Zuckerberg to change his ways.

The resolutions were included in Meta’s proxy statement, which was sent to shareholders on Friday.

Shareholders will now submit votes on the resolutions ahead of Meta’s annual meeting of shareholders, which is scheduled for May 25. Proponents of the proposals will be allowed to speak at the virtual meeting and the results of the vote will be announced afterwards.

“Even when shareholder resolutions don’t win a majority, they have influence on the board and in management and also let the general public know that shareholders care about what’s going on,” O’ said. Connell. “We want to see real corporate governance. We want to see competent management of this company.

Asked about the resolutions, a Meta spokesperson said, “We value the views of our investors and engage with them regularly to get their perspective. We look forward to continuing the dialogue, including at our annual meeting of shareholders in May. »

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