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Inflatable angry emoji looms over Facebook’s annual meeting of the board

MENLO PARK, California./BOSTON (Reuters) – Protesters carry an inflatable angry emoji plan to greet shareholders of Facebook Inc. as they gather for the annual meeting on Thursday, the latest sign of the struggle to shake off a user’s privacy scandals and rein in fake news and hate speech.

FILE PHOTO: The entrance sign to Facebook headquarters is seen in Menlo Park, California, on Wednesday 10 October 2018. REUTERS/Elijah Nouvelage/File Photo

The social media giant will once again be the face of demands for reforms on Thursday during the meeting, including shareholder proposals that call for the renewal of the company’s voting structure and the ousting of Chief Executive Officer Mark Zuckerberg as its president.

The measures have little chance of success, if a dual class share structure gives Zuckerberg and other insiders control approximately 58% of the vote. And many investors have shrugged off the scandals surrounding the company, it has beaten Wall Street’s estimates for revenue growth and continues to add users around the world.

But even though the votes are largely symbolic, they are still seen as a useful barometer of the sentiment of the investors about how well the social media icon is dealing with unprecedented challenges to its hands-off approach and content.

Last year, approximately 83% of the shares held by outside investors voted for a proposal would be the company to move to a structure of one vote per share and do away with the supermajority of shares.

A coalition of activist groups have urged big investors to refuse Zuckerberg’s appointment to the board of directors this year, saying Facebook has failed to protect users, especially racial and religious minorities.

Led by the consumer group, Majority Action, and civil rights advocate to Change Color, they gathered more than 125,000 signatures on a petition targeting BlackRock Inc, one of Facebook’s largest outside investors.

The funds of BlackRock, backup all Facebook’s director nominees from last year, but also voted for two shareholder proposals that would have restructured Facebook’s governance structure.

“Facebook has always proven that the lack of care for the users and is becoming more closely linked with the dissemination of racism and hatred online,” said Lisa Lindsley, capital markets advisor at SumOfUs, a other group in the activist coalition and the person responsible for the 8-foot (2.5-meter) inflatable angry emoji.

“The last actions to limit the consequences of too little and much too late,” she said, pointing to the live-streaming on Facebook of the shooting that killed 51 people worshipping at two Christchurch mosques in New Zealand.

BlackRock declined to comment on the petition, a spokesperson says that it is not preview, vote or comment on specific companies.

UNDER THE MICROSCOPE

Facebook is under the supervision of regulators and shareholders since last year, the report found that data of some 87 million users had shared with the now-defunct political data firm Cambridge Analytica.

The company has also come under fire over the Russian interference in the 2016 AMERICAN presidential elections, who used social media, and are often the shifting of the policies around which content is allowed on the platform.

U.S. House of representatives Nancy Pelosi criticized the company on Wednesday, saying she was no longer willing to give Facebook the benefit of the doubt on Russia after it refused to remove a heavily edited video that tried to make her look inconsistent.

“I thought it was subconsciously, but it is clear that they wanted minions and enablers of false information to go on Facebook,” she said.

The comments raise the specter of tougher action in Congress against Facebook. Pelosi has previously warned that the Section 230 of the Communications Decency Act, which shields tech companies from legal liability for content created by their users, was a “gift” that had been abused and could be reconsidered.

Investors do not seem worried.

The shares of the company jumped 10 percent after its last earnings report, even as it announced it was setting aside up to $5 billion for what would be the largest civil penalty ever paid to the Federal Trade Commission, which is investigating Facebook over alleged privacy violations.

One of Facebook’s biggest fund investors, William Danoff, the $123 billion Fidelity Contrafund, said nothing of Facebook privacy issues in its most in its most recent quarterly comments to investors.

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He wrote only that, if his portfolio’s second largest holding, Facebook “appeals to us on the basis of the growth in the various apps and the revenue from advertisers who want to reach that the company has a huge base of daily active users.”

Danoff has been a long-time backer of Facebook, and previously indicated that he was satisfied with the reform efforts to date.

Under other Facebook investors, last year the Vanguard Group, Inc retained the support of Zuckerberg and Sandberg, and supported a measure to the reform of Facebook’s voting structure.

Reporting by Katie Paul and Ross Kerber; Editing by Lisa Shumaker

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