Facebook investors want to seize a golden opportunity to force out Mark Zuckerberg as chairman (FB)

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Zuckerberg controls Facebook thanks to the way the company's stock is structured, meaning he has final say on the company's direction.
That's frustrating for activist investors who watched the Cambridge Analytica scandal wipe $60 billion off the firm's market cap over the past few weeks.
Now is a golden opportunity for those investors to gang up and call for Zuckerberg to step down.

Mark Zuckerberg's congressional grilling last week was a reminder that he still has total control of Facebook.

Thanks to the firm's stock structure, its public investors — even those with $1 billion (£700 million) holdings — don't have much say on the company's future.

Facebook has two classes of shares. Class A shares trade under the FB ticker on public markets and come with one vote for each share. Class B shares are available only to insiders and have 10 votes for each share.

Zuckerberg owns lots of class B stock, enough to afford him 60% of the voting power. He is also Facebook's chairman. In other words, if he wants something to happen at Facebook, it happens.

Now that Zuckerberg and Facebook are under closer political scrutiny over the Cambridge Analytica data scandal, Facebook's powerless activist investors have picked an opportune time to criticize the firm's structure.

Illinois' treasurer is the latest investor to call for Zuckerberg to step down as chairman.

"In essence Mr. Zuckerberg is not accountable to anyone," Michael Frerichs told the Financial Times. "Not the board, nor the shareholders. Right now, Mr. Zuckerberg is his own boss and it's clearly not working."

Frerichs oversees college savings funds for Illinois residents, and he is known for using the investments to pressure companies. His holdings in Facebook are not clear.

What is certain, however, is that he's backing a plan by New York City Comptroller Scott Stringer, who called for Zuckerberg to step down as chairman earlier this month.Stringer — who supervises funds with an almost $1 billion stake in Facebook — wants an independent chairman and three new board members with expertise in ethics and data privacy.

His argument is simple: The revelation that Cambridge Analytica improperly accessed millions of users' data wiped $60 billion off Facebook's market cap. Zuckerberg's control of Facebook makes the stock vulnerable whenever he makes a major misstep — and that has big repercussions for shareholders.

Zuckerberg won't give up control easily, if at all. He told Vox earlier this month: "One of the things that I feel really lucky we have is this company structure where, at the end of the day, it's a controlled company.

"We are not at the whims of short-term shareholders. We can really design these products and decisions with what is going to be in the best interest of the community over time."