Facebook Shareholders—When Will They Act?
Karen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The likelihood of Facebook’s (NASDAQ: FB) Mark Zuckerberg returning to his post as CEO seems to fade with each passing day.
And not without good reason. Like climbers who scale Mt. Everest or surfers who ride the 40-foot waves, it’s not the win at the end that matters – it’s the kick-butt ride getting there!
Mark Zuckerberg started with an idea, while still a 24-year student at Harvard, to developing a way for students to easily contact each other. In January 2004, Mark started writing the code that would eventually become Facebook and started the climb up his personal mountain. In the summer of 2004, he incorporated Facebook and moved operations to Stanford Research Park in Palo Alto, California. He built Facebook into an international powerhouse which culminated in his ringing the Nasdaq bell that fateful Friday morning, and for Mark that was the end of the game. It was time for him to move on.
Unfortunately, however, Facebook’s shareholders don’t feel quite the same way. As President and CEO, Mr. Zuckerberg is paid handsomely to fulfill those duties and provide the company with leadership. But his disappearance shortly after his marriage has left shareholders angry, confused and unsure about what action to take.
It’s easy for shareholders to fire a CEO for incompetency. John Sculley was hired as Apple’s (NASDAQ: AAPL) CEO is 1983, only to cause Steve Jobs to be fired in 1985, and who himself was fired for incompetency in 1993. Closeout retailer Tuesday Morning (NASDAQ: TUES) fired Kathleen Mason for her underperformance as CEO. And Nortel Communications’ (remember them?) CEO Mike Zafirovski resigned in August 2009 after failing to turn the company around.
But what about a CEO who simply disappears? Has Mr. Zuckerberg stepped down from his position, should shareholders take the initiative and find his replacement, or do they just sit and wait, hoping for his return? And who would be selected to replace him? Would shareholders look to one of Facebook’s Board of Directors, such as Marc Andressen or David Size? Or would someone from another social media firm be a better candidate to take over Facebook’s leadership role?
Facebook’s mounting problems may ultimately be what forces shareholders to act and the window of opportunity for Mr. Zuckerberg to resume his duties is closing quickly. But Facebook’s shareholders and employees deserve better than to be left waiting in limbo while the company flounders.
Fool blogger Karen Rogers does not own shares in any of the companies mentioned in this entry. The Motley Fool owns shares of Apple and Facebook. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.