Facebook and Google autocrats too powerful to challenge
America’s oil giants faced a historic double blow of shareholder uprisings last week. At Exxon Mobil – which over the past decade has gone from being the world’s most valuable company to losing its place in the Dow Jones Industrial Average – investors have installed two new directors, named as part of a campaign to to force the company to fight more actively against climate change. .
Exxon spent tens of millions to oppose the motion, to no avail. Its strategy to strengthen its commitment to oil and gas in the face of regulation, activism and climate science now appears to be on the ropes.
Chevron, the company’s biggest rival, has also tasted defeat, with 61% of shareholders voting for a proposal to force it to cut emissions faster than the targets the company had set itself.
Whether the uprisings were carried out purely for commercial gain or because major shareholders feel compelled to support the green activists (giants such as BlackRock supported the Exxon rebellion), they were a powerful show of force and suggest that investor activism and long-term thinking are not. dead.
In other words, except in Silicon Valley. Big tech may not be looking down the barrel of a net zero world in which their core businesses inevitably shrink, but that doesn’t mean they are trouble-free.
The U.S. government is actively seeking to dismantle Facebook and Google, and Amazon may not be far behind, as a monopoly abuse lawsuit brought by the District of Columbia showed last week.
Regulation by other means, be it privacy or controls over how they moderate speech, also seems inevitable, although it has been slow in coming.
Damage to the reputation of Internet companies perceived to foment violence, suppression or disinformation also carries business risks, as shown by the boycotts of advertisers on Google’s Facebook and YouTube, and the departure of talented engineers.
Shareholders are not blind to this. At Google’s annual meeting this week, alongside typical director appointments and compensation packages, investors will vote on eight proposals.
They range from a proposal to appoint a human rights expert to the company’s board of directors, to greater transparency on how it complies with government requests to remove material, to a report annual on how it manages competition enforcement risk.
The latest of these Google attempted to strike the ballot, but was canceled by securities regulators, making the vote itself a minor victory.
Not that it matters. None of them will pass, since 51.6% of Google’s voting rights are held by Larry Page and Sergey Brin, the two founders of the company, who do not have a managerial position in the company but continue to sit on its board of directors.
Due to the company’s super share structure, which gives Brin and votes for every share, the duo retain power despite only 11.7% of the company’s value.