No matter how bad the Facebook whistleblower allegations get, Mark Zuckerberg remains untouchable

So far, shareholders appear unmoved by revelations about Facebook’s harmful effects and its unwillingness to mitigate them, for fear of sacrificing what whistleblower du jour Frances Haugen calls “little slivers of profit.” Yes, Facebook’s share price has fallen by nearly 5% over the past month, but that’s as much to do with generalized fears over the continued efficacy of the kind of surveillance-based advertising it deploys as it is about anything else.

This makes sense. As Haugen suggested to a U.K. Parliamentary committee Monday, Facebook avoids taking actions that might help fix things—such as being more transparent about its safety work, or adding friction that could slow the spread of disinformation—because it is scared of shareholders suing it for going beyond what the law requires. Facebook doesn’t do “stakeholder capitalism,” and its shareholders seem fine with that.

But what if the stories still to come are so damaging that shareholders do revolt? Then they will hit the age-old problem (in Facebook-historical terms) of Zuckerberg’s complete and utter control over the company.

Zuckerberg simply cannot be second-guessed, let alone fired, because he controls around 58% of Facebook’s voting shares: Specifically, he and other insiders own Class B shares that have 10 times the voting rights of regular Class A shares. To further entrench this situation and ward off the threat of activist investors, five years ago the firm created new Class C shares that give the holder economic ownership, but no voting rights.

This is a strategy that has also been deployed at companies such as Google, to ensure management’s ability to make long-term strategic moves, the short-term consequences of which may be unpalatable to shareholders. But the effect is to make the CEO untouchable. Earlier this year, Facebook’s board rejected proposals that might have weakened Zuckerberg’s grip by replacing him with an independent chairman and eliminating Facebook’s special class of super-voting shares.

So it is difficult to see what might possibly dislodge Zuckerberg, short of his disqualification as director of a public company by the U.S. Securities and Exchange Commission (SEC). As it happens, Haugen has made formal complaints to the SEC about Facebook’s opacity and bad behavior, including its alleged misrepresentation of metrics to investors and advertisers. Legal experts are skeptical that there’s a strong case for securities fraud, but there is significant pressure on the agency to bring a case nonetheless.

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