CalSTRS Will Engage Facebook Amid Scandal on Privacy Issues
(Bloomberg) -- The California State Teacher’s Retirement System plans to seek information on what Facebook Inc. is doing to protect user data following a privacy scandal.
The pension giant disclosed the plan on Thursday after its chief investment officer, Christopher Ailman, joined the ranks of disgruntled Facebook users by removing his personal account, claiming in a tweet that the social media company’s lack of oversight and poor management was “offensive.” On Wednesday, Facebook CEO Mark Zuckerberg said that the crisis, including the #DeleteFacebook movement which Ailman referenced, wasn’t meaningfully affecting the business.
“We are currently establishing contact with Facebook to learn more about what controls are in place today to protect users’ data into the future,” Aeisha Mastagni, a portfolio manager within CalSTRS’ corporate governance unit, said in a statement. “Additionally, we would like to understand what additional steps Facebook is taking to protect this data in order to regain the trust of their users, the public, and their shareholders.”
Facebook is embroiled in a scandal in which the data of up to 87 million users may have been compromised in the run-up to the 2016 presidential election. Shares have declined about 15 percent since mid-March, when news first broke of the situation.
Ailman’s tweet marks the first time an investing figure of this stature has voiced participation in the #DeleteFacebook movement. It comes at a time when large institutional investors are becoming more vocal about the business practices of the companies they own. BlackRock Inc., the world’s largest asset manager, said Thursday it plans to start two exchange-traded funds that will exclude civilian firearms makers.
CalSTRS has owned Facebook since the company’s public offering in 2012 and, as of Dec. 31, its stake was valued at $931.2 million, according to the statement. The California Public Employees’ Retirement System held 5.6 million shares, collectively making California the 33rd biggest holder of the stock, according to data compiled by Bloomberg.
In an email Thursday, Ailman said deactivating his page “was a personal decision and has nothing to do with the investment portfolio.”
Facebook Chief Operating Officer Sheryl Sandberg said in an interview Thursday that her team has a long way to go to reassure wary customers and added that some advertisers have curtailed spending amid the privacy scandal.
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