Facebook CEO Mark Zuckerberg has 55% of the company’s voting shares, giving him majority power.Experts say it’s “a bad idea” for one person to hold so much control of a behemoth like Facebook.The notion is more profound given leaked docs that show Facebook’s dismissal of its societal harm.10 Things in Tech: Get the latest tech trends & innovations Loading Something is loading.
That’s significant, according to her, because it’s “a very unique role in the tech industry.She said “there are no similarly powerful companies that are as unilaterally controlled.” Or put more bluntly in another part of the hearing: “There is no one currently holding Mark accountable but himself.”
He is, essentially, Facebook’s “key man,” a person who has ultimate say in business decisions and without whom the firm would be heavily impacted.
Experts told Insider that there is cause for concern around one person having control over a controversial family of platforms that affect hundreds of millions of people.
“I don’t think it’s a stretch to argue that Mark Zuckerberg is the most powerful person who’s ever walked the face of the earth, and I think that kind of power being held by one person is generally a bad idea,” Whitney Tilson , a former hedge fund manager and CEO of Empire Financial Research, told Insider.
Zuckerberg’s outsized power has been debated for years Company founders with majority control of a firm aren’t rare.It’s most prevalent in the tech world, where dual-class structures are common.Google founders Sergey Brin and Larry Page, for example, stepped away from the giant in 2019 but remained on the board and collectively still have majority control of the company.
“You typically don’t have companies like GM or Ford or Bank of America that are controlled by any one investor,” Chris Haynes , an associate professor of international affairs and political science at the University of New Haven, told Insider.
“This is not the norm.”
Proponents of the arrangement often say it allows company leaders to stay trained on long-term success without distractions from short-term pressures.
“Having a company controlled by a single person, ‘the brainchild’ when it comes to tech companies, it does make the company much more nimble, and they’re able to really turn a dime,” Haynes said, since they don’t have to get a lot of investors on board to make a decision.
But it can also slow things down.Facebook lists Zuckerberg’s outsize control as a potential risk factor for investors, saying it “could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support.”
Critics say the control can shield companies from concerns that can harm society and investors, and it can cause volatility.
“I think you’re seeing that in the case of Facebook,” Haynes said.
Facebook has had a rocky few weeks after documents leaked by Haugen to the Wall Street Journal showed Zuckerberg and other insiders knew the company’s platforms had negative effects on the public and dismissed those concerns.
“Facebook is bigger than any religion in the history of the world, and there is 100% control residing in one man,” Tilson said.
Joy Poole, a former Facebook employee who’s now at the consulting firm Emergence, told Insider that lawmakers should “absolutely” explore how regulation could decide the amount of majority share CEOs have in their companies.But there may be more pressing issues.
“Mark Zuckerberg has majority control over a company with a tremendous amount of influence in the world,” Poole said.”I don’t believe for a minute though, that if he had 49% control, that we would magically find answers to the complex questions we are facing here.”
However, last week’s hearing with Haugen and her disclosure of internal documents to the US Securities and Exchange Commission could change things, Tilson said, though it’s not likely.
If the SEC investigation finds that Facebook misled investors by failing to disclose research of negative harm on teens, among other findings, then the agency could demand that he step down, according to Tilson.
“That would be the only way I can think of that would overcome his controlling voting shares,” he said.
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