Although Facebook’s stock has mostly recovered from its Cambridge Analytica lows, stockholders are unamused by the rocky ride.
“Scandal is not good for the company’s bottom line,” said one investor Thursday during Facebook’s 2018 annual shareholder meeting.
CEO Mark Zuckerberg has become quite good at acknowledging the scandals over the past year or so.
“The main thing we need to do right now is take a broader view of what our responsibility to the community is, not just reacting when issues come up,” Zuckerberg told the assembled stockholders.
The meeting gives investors an opportunity to directly question Zuckerberg and top Facebook executives and make proposals to the board.
As in years past, several of Thursday’s proposals pushed to change the structure of Facebook’s voting stock and make one share equal to one vote. Facebook’s current dual class stock structure gives Zuckerberg and a small coterie of insiders outsized voting rights.
All of the shareholder proposals were again rejected by majority vote.
“We are at a vital impasse for our company,” said Christine Jantz, chief investment officer at Northeast Asset Management, a large Facebook investor, whose proposal was turned down. “We’re faced right now with situations Facebook clearly does not have the expertise to manage [and] shareholders will have no assurance that management is held accountable or that critical issues will be addressed.”
To be fair, Facebook has changed in the wake of the 2016 US presidential election and Cambridge Analytica fallout.
Facebook has been sharing more information about how it identifies and removes unsavory content from the platform and has promised to boost the headcount of its safety and security team to 20,000 people by the end of the year. It’s also creating searchable databases of paid political ads – the US version launched last week – and investing in artificial intelligence to find and remove fake accounts as early as possible.
“We’re a company that just takes a lot of responsibility when we see issues,” Zuckerberg said. “Right now there is a lot of criticism about the company. I don’t agree with all of it, but I think some of it is really fair in pointing out the issues where we should have been doing a better job.”
Facebook has been criticized for being far too reactive and only taking action after something is pointed out to company, often by the media.
In the case of Cambridge Analytica, Facebook was somewhat proactive, but not in a good way. The company threatened to sue The Guardian in March the week before it published its piece featuring Cambridge Analytica whistleblower Christopher Wylie.