Meta shareholders slam Zuckerberg, question ‘dystopian downsides’

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

Concerned investors are pushing two resolutions at the social media titan’s upcoming shareholder meeting they say would provide badly 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 accountability group called SumOfUs that’s working with activist investors is sending a report to more than 4,000 institutional investors with stakes in the company – among them Vanguard, Fidelity and BlackRock.

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

The group places blame for these crises squarely on Zuckerberg, who they say has failed to prove that his recent embrace of the metaverse is anything more than a “rushed attempt to divert attention from fundamental issues with Meta’s core business.”

Christina O’Connell, SumOfUs’s shareholder engagement advisor, told The Post that Meta’s plummeting stock price should wake up investors.

Shareholders are worried about “dystopian downsides” to Mark Zuckerberg’s metaverse pet project.
Facebook

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

The first resolution, which SumOfUs is pushing alongside shareholders Harrington Investments and the Park Foundation, calls for an outside assessment of Meta’s Audit and Risk Oversight Committee, a board the company created in 2020 that is supposedly independent from Zuckerberg and makes decisions about content moderation issues such as former President Donald Trump’s ban from Facebook and Instagram.

“There’s a real concern that given the amount of problems we’ve seen with the company, that the committee is not managing the company’s behavior and performance very well,” O’Connell said. “We would like to see an independent analysis of how that committee is functioning.”

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

The proposal is supported 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 outside audit of the metaverse’s potential risks – such as the potential for harassment and hate speech, as well as privacy concerns – then seek a shareholder vote to gauge whether investors support the project.

“Meta has been unable to manage its problems here now in the world where we’re all living, so it’s pretty shocking that they want to move into a more complex platform such as the metaverse,” O’Connell said. “Harms to children, harassment, hate speech – that all becomes amplified when you start moving into the metaverse.”

Mark Zuckerberg
Mark Zuckerberg can effectively veto shareholder resolutions due to his “supervoting” shares.
Getty Images for SXSW

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

Meta’s unconventional ownership structure allows Zuckerberg to effectively veto any shareholder attempt to change the company’s operations. His stake in Meta is composed largely of “supervoting” shares, allowing him to control roughly 58% of votes when the company considers shareholder proposals.

Nonetheless, O’Connell argues that shareholder action is still one of the best ways to push 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 shareholder meeting, which is set for May 25. Backers of the proposals will be allowed to speak at the virtual meeting and the results of the vote will be announced afterward.

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

Asked for comment on the resolutions, a Meta spokesperson said, “We value the views of our investors and regularly engage with them to get their perspective. We look forward to continuing the dialogue, including at our Annual Shareholder Meeting in May. ”

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