Calls to loosen Zuckerberg’s grip on Facebook

new york — Facebook has always had one absolute leader, cemented by a share class structure that maintained Mark Zuckerberg’s voting control even when he sold millions of shares. Some investors grumbled, but most were happy to stay quiet as the stock surged. This week’s plunge upended that dynamic, increasing calls for changes at the top.

“It’s never an issue until things go wrong,” said Pivotal Research Group analyst Brian Wieser. He thinks a change in Facebook leadership is inevitable, and said the latest numbers could hasten that. “It’s really hard to imagine the status quo holding.” A Facebook spokeswoman declined to comment.

On Thursday, Facebook fell 20 per cent, costing investors $120 billion — the biggest single-day loss for an individual stock in history. Shareholders who had weathered months of renewed debate over Facebook’s role in society and the ethics of its business model suddenly turned tail when they realised growth had run out on Facebook’s core money-making app. Growth rates will decline by “high single-digit percentages” each of the next two quarters, chief financial officer David Wehner said.

The loss of faith emboldened voices that have called for Zuckerberg to share more of his voting power and give up his role chairing the board to a more independent figure.

“Zuckerberg answers only to Zuckerberg,” said Jonas Kron, director of shareholder advocacy at Trillium Asset Management, which supported a shareholder proposal last year to replace Zuckerberg as chairman of the board. Since Thursday’s sell-off, he has received new phone calls and e-mails from other investors expressing support. He declined to identify those people.

For more than a year, Facebook and other social-media companies have been under fire from policy makers and regulators for letting fake news, trolls and Russian manipulators proliferate on their services. Now that they’re cracking down, it’s denting growth, spooking investors. Authentic accounts and real information may be good for business longer term. But Kron said Facebook could have avoided some of the trouble if Zuckerberg’s power was checked by an independent chairman.

It’s never an issue until things go wrong Brian Wieser, Analyst, ivotal Research Group