Social Media

At Facebook, it's Zuckerberg's way or the highway, experts say

Concerns about Facebook's corporate governance: Expert
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Concerns about Facebook's corporate governance: Expert

Some investors are concerned about the future of Facebook after shareholders approved a new class of nonvoting Class C shares on Monday.

"You're basically placing all of your trust into the genius of one person, and even a great genius sometimes makes mistakes," Charles Elson, director of the University of Delaware's John L. Weinberg Center for Corporate Governance, told CNBC's "Closing Bell."

In April, CEO Mark Zuckerberg said that the new stock structure would enable him to help Facebook "continue to build for the long term," while allowing him and his wife to pursue their philanthropic efforts. The structure allows the Facebook founder to sell his nonvoting shares, while retaining Class A and B shares, allowing Zuckerberg to retain control of the company.

Elson said that voting rights give shareholders means to "protect their capital by replacing management, replacing the board."

Facebook's new structure, he argued, puts investors at risk by lowering accountability for Zuckerberg, who Elson sees as a "talented CEO."

Goodridge: My beef with Zuckerberg
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Goodridge: My beef with Zuckerberg

Shareholder Julie Goodridge of NorthStar Asset Management told "Closing Bell" on Monday that she's not happy with the new share structure.

"My beef with Mark Zuckerberg is, look, it's fine if you want to maintain massive control of the company. You should've hung on to 51 percent of the shares. That's just fair and makes a whole lot of sense. He would've accomplished the same goal," said Goodridge.

Shareholder Ross Gerber, CEO of Gerber Kawasaki, disagreed, saying that investors have to accept that Zuckerberg is running the company on his terms.

"My thing is if you don't like it, don't buy the stock. ... If you don't like the structure and the way you're investing with Zuckerberg, then don't invest in Zuckerberg," Gerber said.

Facebook declined to comment to CNBC.