Facebook, Inc. - Shareholder-Analyst Call - NasdaqGS:META

NasdaqGS:META

Michael Passoff, CEO of Proxy Impact, presented proposal #10 during the shareholder meeting. Here is a detailed summary of his statements:

1. Introduction: He introduced himself and stated that he was presenting proposal #10, which requests the Board to assess the risk of increased sexual exploitation of children as the company develops and offers additional privacy tools, such as end-to-end encryption.

2. Context of the Proposal: Passoff highlighted the alarming statistics regarding online sexual abuse material, noting that in 2019, there were nearly 17 million reported cases, with approximately 94% of those cases originating from Facebook and its platforms (including Messenger, Instagram, and WhatsApp).

3. Concerns About Encryption: He expressed concern that Facebook's plan to implement end-to-end encryption across its platforms could make it difficult to detect and report child sexual abuse material. He cited estimates from the National Center for Missing and Exploited Children, which suggested that such encryption could render 70% of child sexual abuse material invisible, equating to an estimated 12 million instances that are currently being detected and reported.

4. Criticism of Facebook's Approach: Passoff criticized Facebook's philosophy of "move fast and break things," arguing that it should not apply to issues involving the safety and well-being of children. He emphasized that the company should prioritize the protection of children over the implementation of privacy tools.

5. Legal and Regulatory Risks: He pointed out that pending legislation in Congress could make Facebook legally liable for child sexual abuse material, indicating that the company faces increasing regulatory and reputational risks due to this issue.

6. Shareholder Concerns: Passoff conveyed that shareholders are legitimately concerned about Facebook's role as a facilitator of child abuse and exploitation, warning that the situation could spiral further out of control if the company adopts end-to-end encryption without first addressing the issue of child predators.

7. Call to Action: He urged Mark Zuckerberg, as the Chairman, CEO, and Founder who controls approximately 50% of the vote, to consider the implications of deploying end-to-end encryption without first ensuring the safety of children. He expressed hope that Zuckerberg would want to leave a legacy of making the Internet a safe place for children.

8. Conclusion: Passoff concluded his statement by reiterating the importance of addressing the issue of child exploitation and the need for Facebook to take responsibility in protecting vulnerable populations.

Overall, Michael Passoff's statements focused on the risks associated with Facebook's privacy initiatives, particularly concerning child safety, and called for the company to prioritize the protection of children in its decision-making processes.

Here is a detailed list of what David Kling, the Former VP, Deputy General Counsel & Corporate Secretary, has said during the shareholder/analyst call:

1. Opening Remarks:

   • Welcomed attendees to Facebook's 2020 Annual Meeting of Stockholders.
   • Acknowledged the unique circumstances of the meeting due to the global pandemic and expressed hope for the safety and health of all participants.
   • Noted that the meeting is being held in an all-virtual format and emphasized the importance of respectful engagement with stockholders.

2. Introductions:

   • Introduced the members of the Board of Directors participating in the meeting.
   • Mentioned the presence of Richard Jackson from Ernst & Young LLP, the independent registered public accounting firm, and Chris Vico, the inspector of election.

3. Formal Business:

   • Confirmed that the proxy statement was properly mailed or made available to all stockholders of record.
   • Announced that a quorum for each proposal is present, allowing the meeting to transact business.
   • Informed attendees about the 11 proposals to be considered at the meeting, as described in the proxy statement.

4. Voting Instructions:

   • Reminded stockholders that if they had already sent in a proxy and did not intend to change their vote, there was no need to cast a vote during the meeting.
   • Informed stockholders present who had not returned a proxy or wished to change their vote that they could do so using the voting link.

5. Proposal Presentations:

   • Introduced the first item of business: the election of the Board of Directors and listed the nominees.
   • Announced the second item of business: ratification of Ernst & Young LLP as the independent registered public accounting firm.
   • Introduced the third item of business: approval of the Director Compensation Policy.
   • Mentioned the receipt of 8 stockholder proposals eligible for voting and stated the Board of Directors' recommendation against each of proposals 4 through 11.

6. Closing of Formal Meeting:

   • Announced the closing of the polls after the last proposal had been presented.
   • Reported on the preliminary results of the voting, confirming the election of the Board of Directors, the approval of Ernst & Young as the accounting firm, and the approval of the Director Compensation Policy.
   • Stated that proposals 4 through 11 had been rejected by a requisite majority of the votes cast.

7. Adjournment:

   • Concluded the formal part of the meeting and announced the adjournment.
   • Reminded attendees that Mark Zuckerberg would provide a company update and that the Q&A session would follow.

8. Q&A Session:

   • Invited Mark Zuckerberg, Sheryl Sandberg, Dave Wehner, and Nick Clegg to join him for the Q&A session.
   • Thanked those who submitted questions in advance and during the meeting.
   • Announced that they would take questions a little past the scheduled time to answer as many as possible.

9. Final Remarks:

   • Thanked attendees for participating in the annual meeting and concluded the session.

This summary captures the key points and statements made by David Kling throughout the meeting.

Jonas Kron, representing Trillium Asset Management, spoke on behalf of Proposal 5 during the Meta Platforms, Inc. (Facebook) Annual Meeting of Stockholders. Here is a detailed summary of his statements:

1. Introduction: Jonas Kron introduced himself and stated that he was moving item 5, which seeks an independent Board Chair policy for Facebook.

2. Support for the Proposal: He noted that the proposal had been co-filed by several significant entities, including the New York City Controller and the treasurers of multiple states, indicating broad support.

3. Concerns About Power Concentration: Kron emphasized the risks associated with concentrating too much power in one individual, specifically referencing Mark Zuckerberg's dual role as both CEO and Chair of the Board. He expressed concern that this concentration of power is not in the best interest of shareholders.

4. Board Independence: He pointed out that since May 2019, three respected independent directors had left the Board, which raised concerns about the Board's independence and functionality. He highlighted that the current Board composition is only one-third independent.

5. Historical Context: Kron referenced the previous year's shareholder proposal, which received 68% support from outside shareholders, indicating a strong desire for governance reform.

6. Comparison to Other Companies: He mentioned that other successful companies, such as Alphabet, Apple, and Microsoft, have independent Board Chair positions, contrasting their governance structures with Facebook's.

7. Investor Voice: Kron stated that he was there to ensure that investors holding the majority of Facebook's economic value have a public voice regarding governance issues. He wanted to make it clear that many investors believe the current governance structure is unwise.

8. Call for Change: He concluded by urging shareholders to support the proposal for an independent Board Chair, emphasizing the need for better governance and accountability within the company.

Overall, Jonas Kron's statements focused on advocating for an independent Board Chair to mitigate the risks of concentrated power and to enhance governance at Facebook.

Here is a detailed list of statements made by Mark Elliot Zuckerberg during the shareholder/analyst call:

1. Introduction and Acknowledgment of the Pandemic:

   • Thanked shareholders for their support and for being on the journey with the company.
   • Mentioned the global pandemic and how the company is working to address it and help people.

2. Health Response:

   • Discussed efforts to provide accurate information about COVID-19, including the creation of a COVID information center on Facebook.
   • Highlighted a widespread symptoms survey to help local governments and health officials make public health decisions.

3. Staying Connected:

   • Emphasized the importance of communication services during crises and how people are relying on Facebook to stay connected.
   • Noted that messaging usage increased significantly during the pandemic, with some types of communication increasing by up to 10x.
   • Introduced Messenger Rooms, allowing up to 50 people to connect for social events.

4. Economic Recovery for Small Businesses:

   • Discussed the impact of COVID-19 on small businesses and the importance of helping them transition to online sales.
   • Introduced Facebook Shops, enabling small businesses to set up online storefronts.
   • Mentioned a $100 million grant program for small businesses.

5. Company Operations and Remote Work:

   • Talked about the company's approach to remote work, allowing employees to work from home and access a broader talent pool.
   • Stressed the importance of remote presence technologies in the company's strategy.

6. Investment in India:

   • Highlighted India as Facebook's largest community and a fast-growing economy.
   • Discussed the opportunity to build new forms of commerce in India, particularly through WhatsApp.

7. Free Speech and Content Moderation:

   • Affirmed the company's commitment to giving people a voice and promoting freedom of expression.
   • Acknowledged the challenge of balancing free speech with the need to prevent harm, citing the need for nuanced policies.
   • Mentioned the establishment of an independent Oversight Board to help set precedents for content moderation.

8. Political Advertising:

   • Stated that Facebook requires disclosure for all political ads and maintains a political ads archive for transparency.
   • Clarified that Facebook does not believe it should vet what politicians say, emphasizing the importance of open democratic debate.

9. Commerce and Libra:

   • Explained how commerce initiatives, including Libra, could enhance the ads business by making it more effective for businesses to reach customers.
   • Discussed the potential for Libra to simplify payments and commerce across different countries.

10. Progress on Non-Ads Businesses:

    • Provided updates on various initiatives, including Dating, Marketplace, Facebook Watch, and Gaming.
    • Expressed optimism about the growth of Facebook Shops and the potential for these initiatives to contribute to the business.

Throughout the meeting, Zuckerberg emphasized the company's commitment to connecting people, supporting small businesses, and navigating the challenges posed by the pandemic while maintaining a focus on governance and responsible content moderation.