New York State Comptroller Thomas P. DiNapoli, trustee of the New York State Common Retirement Fund (Fund), today called on Facebook, Twitter and Alphabet to publicly report what they are doing to enforce the terms of service by which all of their platform users must abide. The Fund has co-filed a shareholder proposal with Arjuna Capital at each company asking their boards to provide information on what steps they have taken to enforce service agreements.
The proposal will be voted on by fellow shareholders at Twitter on May 30, at Facebook on May 31, and at Alphabet Inc. on June 6.
"Billions of social media users are at risk of being exposed to fake news, hate speech and sexual harassment if these companies cannot enforce their own user agreements," DiNapoli said. "Unless safeguards are in place, the companies are at risk of financial losses, lawsuits and reputational damage."
"Facebook and Twitter face an existential threat if they can't provide an authentic and safe user experience—users will simply leave. It is high time investors have a transparent view into the scale of abuses on the platform and how the company is managing them over time. Otherwise we are gambling investor value on apologies and promises to do better," said Natasha Lamb, managing partner, Arjuna Capital.
DiNapoli today also announced that the Fund would be voting against the election of six of the nine Facebook board members, including Mark Zuckerberg; against all four directors up for election at Twitter; and against four of the 10 directors up for election at Alphabet.
One of the reasons for the vote against Twitter directors is that the company is holding a virtual annual meeting, in which shareholders call in rather than address board members face to face. The Fund opposes this practice.
"Virtual meetings allow board members to shirk their accountability to investors by keeping our concerns at arm's length in a conference call," DiNapoli said. "The company owes it to its investors to hold a face-to-face meeting that allows for frank conversation about issues that are important to shareholders."
The Fund holds approximately $1.1 billion in Facebook shares, $43.9 million in Twitter shares and $1.8 billion in Alphabet Inc. shares (including $912 million in Alphabet Class A voting shares).
About the New York State Common Retirement Fund
The New York State Common Retirement Fund is the third largest public pension fund in the United States, with an estimated $206.9 billion in assets under management as of March 31, 2018. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. The Fund has a diversified portfolio of public and private equities, fixed income, real estate and alternative instruments.