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At Facebook, public funds join push to remove Mark Zuckerberg as chairman

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Four major U.S. public funds that hold shares in Facebook Inc on Wednesday proposed removing Chief Executive Officer Mark Zuckerberg as chairman following several high-profile scandals and said they hoped to gain backing from larger asset managers.

State treasurers from Illinois, Rhode Island and Pennsylvania, and New York City Comptroller Scott Stringer, co-filed the proposal. They oversee money including pension funds and joined activist and original filer Trillium Asset Management.

A similar shareholder proposal seeking an independent chair was defeated in 2017 at Facebook, where Zuckerberg’s majority control makes outsider resolutions effectively symbolic.

Rhode Island State Treasurer Seth Magaziner said that the latest proposal was still worth filing as a way of drawing attention to Facebook’s problems and how to solve them.

“This will allow us to force a conversation at the annual meeting, and from now until then in the court of public opinion,” Magaziner said in a telephone interview.

A Facebook spokeswoman declined to comment.

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At least three of the four public funds supported the 2017 resolution as well. The current proposal, meant for Facebook’s annual shareholder meeting in May 2019, asks the board to create an independent board chair to improve oversight, a common practice at other companies.

It cites controversies that have hurt the reputation of the world’s largest social media network, including the unauthorized sharing of user information, the proliferation of fake news, and foreign meddling in U.S. elections.

Illinois State Treasurer Michael Frerichs said in an interview that, while an independent chair might not have prevented all the issues, “there might have been fewer of these problems and less of a drop in share price” at the company.

Shares of Facebook have had a rocky year, under pressure from revelations about the privacy and operational issues as well as concerns over slowing revenue growth. They closed Wednesday at $159.42, 10 percent lower than at the start of the year and well off a closing high of $217.50 reached on July 25.

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The 2017 resolution received the support of a slim majority of outside investors, according to the public fund leaders’ calculations. Magaziner and Frerichs said they planned to talk with larger Facebook investors in coming months to seek their support.

Among funds that are Facebook’s largest investors, the Vanguard Total Stock Market Index Fund and Fidelity Contrafund voted against the 2017 proposal, securities filings show, while the American Funds Growth Fund of America supported it.

American Funds representatives did not reply to requests for comment on Wednesday. Spokespeople for Fidelity and Vanguard declined to comment. Contrafund manager Will Danoff was supportive of Facebook’s response to problems in an investor note in August.

In opposing the 2017 proposal, Facebook said an independent chair could “cause uncertainty, confusion, and inefficiency in board and management function and relations.”

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Zuckerberg has about 60 percent voting rights, according to a company filing in April.

The New York City Pension Funds owned about 4.5 million Facebook shares as of July 31, while Trillium held 53,000 shares.

The Pennsylvania Treasury held 38,737 shares and the Illinois Treasury owned 190,712 shares as of August. Rhode Island funds hold 168,230 Facebook shares, a spokesman said.

Reporting by Arjun Panchadar and Munsif Vengattil in Bengaluru and Ross Kerber; Editing by Sriraj Kalluvila and Rosalba O’Brien

Report typos and corrections to [email protected].
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Fireworks erupt at latest Mueller hearing as chairman Jerry Nadler schools GOP’s Jim Jordan

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A feisty Rep. Jerry Nadler (D-NY) schooled Rep. Jim Jordan (R-OH) for blatantly misstating facts about the investigation into potential coordination between the Trump campaign and the Russian government during the 2016 presidential election.

After Jordan went on a lengthy diatribe against the FBI for supposedly relying on the Steele dossier to launch an investigation against the Trump campaign, Nadler jumped in to formally correct the record.

"It is well established that the investigation was not predicated on the Steele dossier, but rather on the observation of..." Nadler began.

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Trump emphatically explains that unmanned drones don’t have people in them as he rambles about Iran’s big ‘mistake’

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During a joint press availability with Canadian Prime Minister Justin Trudeau, President Donald Trump opened up about the drone that was shot down by Iran.

According to Trump, drones are unmanned, a fact he felt was important to convey to those who haven't seen a Jason Bourne film or a spy thriller.

"Iran made a big mistake," Trump said. "This drone was in international waters clearly. We have it all documented. It’s documented scientifically, not just words. They made a big mistake."

He also said that he doesn't believe the decision to shoot the drone down likely came from the Iranian government in Tehran.

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2020 Election

BUSTED: Trump super PAC accused of lying to government about the source of mysterious $325,000 donation

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According to a report from the Daily Beast's "Pay Dirt" investigative unit, a Super PAC affiliated with President Donald Trump has some explaining to do about a $375,000 donation that was wrongly attributed to one company -- but wire transfers tell a completely different story.

As the Beast notes, "The super PAC America First Action reported receiving a $325,000 contribution last year from a company called Global Energy Producers. But records released in federal court this week indicate that contribution came from an entirely different company," adding that the discrepancy was pointed out by the  Campaign Legal Center which labeled it a violation of federal campaign-finance laws.

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