It has happened countless times before. A tech company takes over the market by storm, toppling over other established players, and forever changing the way people perceive technology – but then, the good days are short-lived as a catastrophic scandal throws the company into chaos, and soon, the CEO or founder is kicked out from the executive table.
Facebook has lost over $70 billion since the Cambridge Analytica scandal and now advertisers are also pulling out of the website
The co-founder of Uber was forced to quit in the midst of reports about gender discrimination in the company; The Equifax data breach scandal which affected 140 million people saw Richard Smith, the CEO and chairman, walking out the door. CEO of Yahoo, Marissa Mayer, was also forced to hand over the control of her company following a myriad of security scandals.
Could the CEO of Facebook, Mark Zuckerberg, face a similar fate as his social media empire starts to show cracks?
This isn’t the first time Facebook is caused due to privacy concerns, but the political implications of the recent data breach have turned the scandal into mainstream news.
Advertisers and Major Organizations Pull Out
Looking at the fate of CEOs and founders of famous tech companies who were forced to give up their business empires in the midst of accusations and scandals, it may seem like the writing is already on the wall for Facebook chair Mark Zuckerberg.
His social media company is engulfed in a serious political scandal after it was revealed that a political consultancy firm amassed data on 50 million people and used it during the 2016 presidential elections to help the current U.S. President, Donald Trump, win, while Zuck sat on the sidelines watching.
Outraged users and shareholders are waging legal battles against the company while large-scale organizations like Apple, Tesla and Mozilla are publicly blaming the executives of the social media site for putting the security of billions in jeopardy for profit.
Firms have also begun to pull their advertisements and their company pages from the website, a trend started by entrepreneur Elon Musk, who announced in a twitter post that he is deleting his Tesla and SpaceX Facebook pages, which had millions of followers.
Zuck in Trouble
Hashtags like #DeleteFacebook and #FireZuckerberg might be the least of the CEO’s problems as he also finds himself in trouble with the law. The government is under immense pressure to regulate the social media platform and the Federal Trade Commission has already launched an investigation to get to the heart of the data harvesting scandal.
Congress has also ordered Zuckerberg to testify and tell everyone the truth about how the company turned a blind eye as data brokers stole valuable information on millions of Facebook users.
Mark Zuckerberg holds majority of the voting shares in his company which means that it would be impossible to kick him out
Dethroning the CEO May be Impossible
As the CEO of the company, Mark Zuckerberg controls over 87 per cent of Facebook’s voting shares which means that even if the rest of the eight board members decided to dismantle him, they won’t have the power to do so unless Zuckerberg himself relinquishes control of his business empire – which seems highly unlikely, judging from his apology tour and a number of staged interviews he has partaken in the past few days.
The CEO holds the throne to his Facebook empire and the company hierarchy that he built himself – which means that it is almost impossible to throw him out without state interference.
But, how is it possible for Zuckerberg to still control over 87 per cent of the company shares when he had publicly announced in December 2015 to give away 99 per cent of the shares, which were valued at $45 billion at that time, to a charity founded by his wife? It turns out that charitable Zuck played it smart and created a Class C stock which didn’t give its holders any voting rights. A $100 Facebook share was split into three $33.33 ones with two of them being class C non-voting stocks. This smart trick allowed Zuckerberg to portray himself as the charitable good guy without disrupting the hierarchy of the company.
