Good day and welcome to Facebook Inc. 2021 Annual Meeting of Shareholders. I would now like to turn the conference over to Jennifer Neustadt. Please go ahead.
Thank you and good morning. Welcome and thanks for joining us for Facebook's 2021 Annual Meeting of Shareholders. I'm Jennifer Newstead, General Counsel of Facebook, this Annual Meeting, which I now call to order. First, I'd like to acknowledge that our meeting today is being held in an all virtual format as the pandemic continues. We hope that each of you and your loved ones are safe and healthy.
Even with the virtual format, we will still be providing our shareholders with the opportunity to participate in today's meeting. Our agenda will start with the business set forth in the proxy Following adjournment of the formal portion of the meeting, Mark will give a company update and then we'll conclude with a Q and A session. Before we begin, I'd like to remind you of the rules of conduct for this meeting, a copy of which is available on the meeting website. We intend to run an orderly meeting. Let me start by introducing the members of our Board of Directors who are participating in our virtual meeting today.
Mark Zuckerberg, Sheryl Sandberg, Nancy Killafer, Robert Kimmett, and Tracy Travis. Mike Johnson, our assistant is also with us today and will act as chair of the meeting in the event of any technical difficulties that prevent me from performing the duties of chair. In addition, we are joined by Richard Jackson of Ernst and Young LLP, our independent registered public accounting firm And Chris Viaco, who will act as the Inspector of Election for this meeting and who will tabulate the results of the voting. Turning now to the formal business. The proxy statement was properly mailed or made available to all shareholders of record as of April 1, 2021.
I've been advised by the Inspector of Election that the holders of shares representing at least a majority of the voting power of our Class A and Class B common stock, voting together as a single class, Our present are represented by proxy here today and the requisite quorum for each proposal is therefore present. Accordingly, this meeting is authorized to transact the business We have 9 proposals to consider at the meeting, each of which is described in the proxy statement. We will discuss those proposals momentarily. First, however, I remind you that if you've already voted and do not intend to make any changes, There is no need for you to cast a vote today. Your vote will be counted automatically without any further action on your part.
Any shareholder present who has not voted or who wishes to change their vote may vote at this meeting by using the voting link. It is currently 10:0:7 Pacific Time and the polls have been opened. You may vote at any time during our discussion of the proposals on the agenda. The polls will close after the last proposal has been presented. The first item of business is to elect our Board of Directors To serve until our next annual meeting.
The director nominees are Peggy Alford, Marc Andresen, Andrew Houston, Nancy Killafer, Robert Kimmett, Sheryl Sandberg, Peter Thiel, Tracy Travis, and Mark Zuckerberg. The qualifications of each nominee are set forth in the proxy statement. No other director nominees have been properly submitted for election pursuant to our bylaws. Therefore, no other nominations may be accepted at this time. The Board of Directors recommends a vote for the election of each of the nominated directors.
The second item of business is to ratify the appointment of Ernst and Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021. The board of directors recommends a vote for this proposal. The 3rd item of business is to approve the amendment to our director compensation policy, Which sets out the annual compensation of our non employee directors. The Board of Directors recommends a vote for this proposal. Finally, we received 6 shareholder proposals that complied with the requirements of SEC rules and are therefore eligible to be voted on at this meeting.
The Board of Directors recommends a vote against each of the proposals 4 through 9. The company's position on each proposal is set forth in the proxy statement. Each shareholder proponent may now present their proposal. I will direct the operator to open your line 1 by 1. Please limit your statement to no more than 3 minutes.
First, for proposal 4, which is a proposal regarding dual class capital structure, Kenzing Tashishar will be speaking on behalf of Northstar Asset Management. Operator, would you please open Ms. Tashishar's line?
My name is Tenzing Tashishar from Northstar Asset Management And I am presenting Resolution 4, a request that Facebook's Board take steps to adopt a recapitalization plan for all outstanding stock The SEC tells all shareholders to vote in the annual elections of the companies in which they are invested In order to make our views known to the company management and directors on significant issues that may affect the value of our shares. Yet at Facebook, ordinary shareholders don't have an equal right to weigh in on significant matters of corporate policy. Whether it's voting for the Board of Directors or dissenting against a new class of shares, without equal voting rights, Shareholders lose this ability to oversee management through Board elections, empowering the CEO and insiders to Appoint a Board that only serves the CEO and management, not shareholders. And it's no secret that our company has struggled due to controversy Just this year, in response to the January 6th insurrection at the U. S.
Capitol, there were criticisms that Facebook Failed to recognize the threat posed by the Stop the Steal movement despite numerous warnings and how Facebook in some cases Was unable to enforce its own rules. 1 news article alleged that the internal Facebook report about this incident Contradicts Mr. Zuckerberg's statements to Congress about Facebook being inhospitable to harmful content about the election and Ms. Sandberg's January comment that the insurrection was largely organized on platforms that don't have our abilities to stop hate, Don't have our standards and don't have our transparency. We believe that the company's failure to appropriately intervene in this incident Caused real world harm and risked shareholder value.
We also believe that these sorts of problems are due to the insulated nature of our management and Board and that shareholders should have the ability to effectively express dissatisfaction through shareholder voting. Mr. Zuckerberg may have bought this company to fruition, but the company's decision to offer common shares of the company on public exchanges, making Facebook a public company brings with it a responsibility to shareholders to practice good governance. Shareholders, we urge you to vote for proxy item number 4. Thank you.
Thank you. Next, for Proposal 5, which is a proposal regarding an independent Board Chair, Michael Farish will be speaking on behalf of the Illinois State Treasury. Operator, would you please open Mr. Farish's line?
Good morning, Mr. Chairman and members of the Board and fellow shareholders. My name is Michael Frerichs and I am the Treasurer of the State of Illinois The long term shareowner of Facebook. I am here at proposal number 5, seeking independent Board Chair for Facebook. This proposal is co filed by fellow state treasurers from Rhode Island, Vermont, New Jersey as well as the Sisters of the Holy Names and other investors.
As long term investors, we firmly believe that establishing an independent Board Chair is one of the key steps Facebook can take to address fundamental governance Short call. To enhance Board oversight of management to build trust in the company and ultimately better serve the interest of the company and shareholders for years to come. Put another way, this is a crucial way to build a stronger company. This question comes to shareholders at a critical moment. Public trust in Facebook has fallen sharply and the company is navigating a regulatory landscape that is changing quickly.
In this difficult and challenging environment, it is important to Stop and consider that CEO position is the most demanding job in Corporate America. And at the same time, Board share responsibilities are tremendously time consuming. We need different people in these 2 distinctly different leadership positions. Selecting an independent Chair would free the CEO to focus on managing the company, Enable the Chair to focus on oversight and strategic guidance. Right now, the CEO exerts excessive influence on the Board and his agenda.
And there is a serious question as to the Board's effectiveness in fulfilling its fundamental oversight and risk management duties. We believe this lack of Board independence oversight has contributed to Facebook mishandling several controversies, which have negatively impacted the company's risk exposures, An independent board share is endorsed by the Council of Institutional Investors as well as many of Facebook's peers, including Google, Microsoft, Apple and Twitter, all of which maintain an independent board chair. Perhaps most importantly, over the past 2 years, majority of Facebook's independent shareholders have voted to separate the CEO and Board Chair roles. In the company's opposition statement, Facebook has argued that the current Board structure is effective And the quote, The Lead Independent Director facilitates effective representation of the interest of all shareholders. We respectfully disagree.
We acknowledge the Board has taken steps to better articulate the powers and responsibilities of the Lead Director. However, these changes are fundamentally insufficient to address the issues at hand because the Lead Director is different from the Board Chair. As the Center for Board Matters emphasizes, the Lead Independent Director does not command the same authority as a Board Chair. And furthermore, Facebook is hampered by a dual class stock structure that gives the CEO control of majority of voting shares. This has had the effect of limiting the voices of shareholders and entrenching insider leadership, which is further hampered by the Board's overall low level of independence.
In closing, we urge Facebook to seize this opportunity to strengthen its corporate governance structure, key the calls of its shareholders, And make a common sense change that will better position the company sustainable long term growth. Thank you.
Thank you. Next for proposal 6, which is a proposal regarding child exploitation, Sarah Cooper will be speaking on behalf of Proxy Impact. Operator, would you please open Ms. Cooper's line?
Hello. My name is Sarah Cooper, And I'm a member of the Survivors Council of ECPAT USA, the leading anti child trafficking organization in the United States. I am here this morning to present Resolution 6 asking the Board to report on the risk of increased sexual exploitation of children As the company develops and offers additional privacy tools such as end to end encryption. 1 year ago, I told my personal story publicly for the first time of being groomed and trafficked by a predator I met on Facebook. He seemed to be my age, but was actually older.
I was groomed starting when I was 15 until just after my 18th birthday. It seems innocent enough at the beginning. I received a Facebook friend request from someone I didn't know. We exchanged messages back and forth and after some time I sent photos to my creditor, then more images to him also known as CSAN. He groomed me for over 2 years.
I thought he was a friend, someone I could trust. I didn't really know anything was wrong until I met him in person and saw his face. I finally realized he was closer to 40 than 18. Once I stepped into his car, it was too late. When I was trafficked, given drugs, sold into sex slavery and held against my will at gunpoint, My instinct was to survive.
I was lucky enough to have been rescued by a friend and thankfully survived my ordeal. Some are not as lucky and never make it home. For years, I was unaware of the dangers lurking on the Internet until I myself became a Today, as an advocate working to prevent child sex trafficking, I've come to understand that law enforcement in the field relies extensively on tips from Facebook to bring predators to justice. But what will happen when you go to End to end encryption on the Messenger app. Facebook admitted that in going forward with implementing end to end encryption, it will not be able to see child sexual abuse And the number of these reports will go down.
Therefore, the number of children's lives that could be saved or helped will be less. Facebook made nearly 21,000,000 reports of child sexual abuse materials last year and it has been estimated that 75% of these will become invisible once it applies to end to end encryption. These reports are not just reports, they are children, Children who are scared and hurt, children who need our help, children who believe Facebook would never hurt them. They are someone's daughter, sister, grandchild and neighbor. Facebook needs to immediately improve age Expanding encryption on its platform until it can protect children.
Privacy is important, but we need a balance of privacy and protection of the most Vulnerable members of society, our children. Facebook is a great platform, but it is not a safe platform. With encryption, it will become one of the world's most dangerous playgrounds for children. Thank you.
Thank you. Next for proposal 7, which is a proposal regarding putting a human or civil rights expert on the Board, Natasha Lam will be speaking on behalf of Arjuna Capital. Operator, would you please open Ms. Lam's line?
Good morning. My name is Natasha Lam and I move proposal number 7 on behalf of Arjuna Capital and co filer, Friends Fiduciary, Asking Facebook's Board to nominate a Board candidate with a high level of human and civil rights expertise. The reason for this request should be obvious. We all know the problem with Facebook and it's not the pictures of puppies and kids, which we love. Facebook is a lightning rod And solving the problem is not so simple.
If it were, we would not be presenting our concerns for the 5th straight year. Rightly, our company is scrambling to build some internal scaffolding, adding experts, policies and a quasi independent oversight board to make high profile content decisions. The latest example of that being the fumbled political hot potato of banning Donald Trump. That is, the Oversight Board deals with the garbage at the end of the pipe, not what is fundamentally wrong with the platform, Not what creates the problems in the first place. Facebook ignores the root cause, which is a business model fueled by clickbait and user profiling.
And while this model has been profitable, it is increasingly problematic, threatening Facebook's brand and social license to operate. Just 1 year ago, over 300 advertisers boycotted the platform after civil rights groups Critical of Facebook for failing to address hate speech launched the Stop Hate for Profit campaign. Facebook is losing the trust of its advertisers, users and perhaps most importantly, public policymakers. Not only has Mr. Zuckerberg been called before Congress on multiple occasions, Facebook is now the center of an antitrust lawsuit from the Federal Trade Commission.
Despite this, we have yet to see a proactive approach to address the problem. Our company demonstrates a repeating pattern of marginally changing policies and practices only after substantial and highly visible public pressure. But changing policies and practices is not enough. Civil rights group Color of Change has criticized Facebook for doubling down on a business model that fundamentally lacks an understanding of how civil rights, voter suppression, And racism actually functions in this country. To solve this problem, it's going to take a lot more than passing the buck To an oversight Board to make the tough decisions at the end of the pipe.
It's going to take Facebook's actual Board Stepping up to the plate and addressing the root cause. And to do that, it needs human and civil rights expertise, which is what we are asking for today. To say that Facebook has adequately addressed human and civil rights is a growth overstatement. It is the Board's responsibility to address this root cause issue and Steward Business Strategy going forward.
Thank you. Next for Proposal 8, Which is a proposal regarding platform misuse. Thomas Van Dyke will be speaking on behalf of A's Eusso. Operator, please open Mr. Van Dyke's line.
Hi. My name is Tom Van Dyke and I'm the Founder of AsiSo. I'm here to talk about Ending this information on our platform today. Mark, I want to talk to you today. You've created a powerful platform, Place where my mother could witness my son's engagement during a time of COVID when she couldn't be there personally.
I thought about where we had shared experiences and we're both fathers. You're a father of 2, I'm a father of 2. Difference is my kids are your age. My daughter in 20s President Obama set up the U. S.
Digital Service and worked there for 9 years. You created this tremendous platform. When my daughter was younger, I coached herself and her friends in soccer and I taught them 4 things: Focus, give 150%, be a good sport and act in integrity and have fun. And those I thought were lessons of life. If they did those things, they would have a happy and successful life.
But what I was not prepared for What would happen with them as women, the amount of sexual harassment that they would experience. If I knew that, then I would They spent more time changing society so they would not have to go through those experiences. You now though, Mark, Have the power with this platform to actually mitigate the misinformation, the hate, the racism, the sex trafficking, To end that pain and push society towards the good. You've prayed several people on the Board, they're saying, well, we can't limit this, we'll limit our revenue. I'll tell you as one of the founders of sustainable investing That if you actually act with integrity and move towards good that you will empower your employees And they'll be more productive.
You empower the community and they'll respect the company that you've created. You empower your users because they'll be proud to
be there and you're Tries to be there as well
and you will make more money and you'll do it in a way that benefits society. There are 2 things that being parent redefined for me 2 words. Those words are love and responsibility. I didn't know a conditional level to add kids. I also didn't know responsibility was.
Facebook is your kid, Mark. You have the responsibility to mitigate hate speech, sex trafficking and the spreading of disinformation. You can do it.
Thank you. And finally, for Proposal 9, which is a proposal regarding a public benefit corporation, Frederic Alexander will be speaking on behalf of James McRitchie and Myra Young. Operator, would you please open Mr. Alexander's line?
Hello. Thank you. I'm Rick Alexander, CEO of the Shareholder Commons here today to present a proposal Requesting that the company convert to a public benefit corporation. This proposal would allow the company to reject shareholder primacy And to promote the interest of all of its stakeholders. Now the company and its proxy statement says they already do so.
But here's the rub, as a conventional corporation, The company can do so only if it profits the shareholders. In fact, the company's own governance guidelines admit that the Board is committed to managing and I quote, With a view toward enhancing long term value for Facebook stockholders. No one else is mentioned. And in the proxy Statement the company says you should vote against the proposal because and again I quote, it could significantly restrain or limit our capacity to take certain corporate actions. End of quote.
Well, of course, that's the point of the proposal. You've heard other proponents today talk about things like sexual slavery. We want to restrain the company from taking actions that promote those things. The company currently considers the interest of billions of people Under their corporate structure, there's billions of people who use their platform in decision making only in the context of delivering value to shareholders. The proposal would change what the corporation could do because it could no longer simply ignore the social costs of its business model.
And this would be a good thing because right now the company optimizes profit even when that means driving traffic with content and algorithms That lead to pandemics, authoritarianism, genocide and child trafficking. Companies has already considered stakeholder interest. For example, in the proxy statement it says, in response to the COVID-nineteen pandemic, we will launch multiple initiatives and they name other good things they have done. Now that's nice, but where do they get the money for such initiatives? It's by triving traffic with anti vaccumous information and other things.
As one report noted, Facebook has failed to remove the accounts of 12 most prominent anti vaxxers who repeatedly violate their terms of service. Why? Because it drives traffic, makes more money. The current business model is actively tearing societies down. To quote from another recent report, Social media has been fundamental to the rise of far right and authoritarian politicians and governments.
Reputation policy and good deeds cannot make up for the fact that Facebook increases traffic In ways that contribute to genocide, pandemics, authoritarianism, as we heard bravely from Sarah Cooper today, sexual slavery. This conduct doesn't just hurt victims. I'm not asking you to cast an altruistic vote. This conduct hurts Facebook's own shareholders Because they have diversified portfolios that suffer when the economy as a whole bears the weight of the systemic threats If corporations like Facebook create, think of the cost of the pandemic to our economy, or the cost of authoritarianism and political unrest. Facebook is a critical gatekeeper in the information economy.
It is in the interest of all stakeholders, including its own diversified shareholders And it confine its profit seeking efforts to those that do not endanger the health of critical social and environmental systems. Conversion to a PBC would change the rules that govern the company allowing it together with its shareholders Together with the shareholders to reject the shareholder primacy that threatens us all. I hereby move the vote on proposal 9. Thank you.
Thank you and thank you all for your statements. The company will not be providing responses at this meeting as our position on each proposal has already been set forth The polls will close shortly. If you intend to vote, you need to do so now. Alright. The time is now 10:30 Pacific Time and the polls are now closed.
I'll now report on the preliminary results of the voting. The final results, including any votes cast at this meeting, Will be filed with the Securities and Exchange Commission on a Form 8 ks within 4 business days. The votes required to approve each of the proposals are set forth in the proxy statement. Based on the preliminary results tabulated by the Inspector of Election for Proposal 1, each of the 9 nominees has been elected to the Board of Directors. Based on the preliminary results for Proposal 2, Ernst and Young has been approved as our independent registered public accounting firm.
Based on the preliminary results for Proposal 3, the amendment to the director compensation policy has been approved. Finally, based on the preliminary results tabulated by the Inspector of Election, each of Proposals 4 through 9 has been rejected by at least the requisite majority of the votes cast. There are no other items of business on the agenda, so this concludes the formal part of our meeting. The annual meeting is now adjourned. Before I ask Mark to begin the company update, I want to remind you that Mark's remarks and the Q and A that follows may contain forward looking statements Regarding future events and the future financial performance of the company.
We caution you to consider the important risk factors that could cause actual results to differ materially from those in any forward looking statements. These risk factors are more fully detailed under the caption Risk Factors In our quarterly report on Form 10 Q filed with the Securities and Exchange Commission on April 29, 2021. In addition, any forward looking statements that we make today are based on assumptions as of this date. We undertake no obligation to update those statements as a result of new information or future events. And now we'll turn it over to Mark.
Alright. Hey, everyone, And thanks for joining us today. It's, you know, it's hard to believe now, but our last annual meeting, We were still in the early stages of this pandemic and, you know, I talked about everything we were doing to help keep people connected and informed, New video and messaging products, that people could use to stay in touch, commerce tools that businesses could use to operate online, and, products and partnerships to help get authoritative health information out there to everyone. And all of that work continues and it's just as important today. You know, and although we're seeing, some good news on vaccination and infection rates in some parts of the world now, there's still a long way to go.
People are relying on our products to connect and keep their businesses running, and the need for authoritative information You know, at the same time, we're starting to get a clearer picture of some of our longer term opportunities and I wanted to Share a quick update on those before we get to the questions today. As I said on, our earnings call the other day, Our our business has been performing better than we expected over the past couple of quarters, and that's given us the confidence to ramp up our investments in a few key areas that are going to be important for the long term, including augmented and virtual reality, ecommerce, business messaging, and the Creator Economy. So first up, I want to talk about augmented and virtual reality, which We think it's going to be the next computing platform. We continue to invest heavily in building out the best experiences here, and this accounts for a major part of our overall R and D budget growth. Quest 2 is due it has set a new standard for VR and We keep shipping updates that make it better and better.
We're also seeing the VR app ecosystem broaden out beyond games and into Social apps, productivity apps, and fitness apps as well. Over time, I expect that augmented and virtual reality are going to unlock A massive amount of value in people's lives and the economy overall. There's still a long way to go and most of our investments to make this work are still ahead of us, but the feedback that we're getting from people is giving us confidence that we're focusing on the right areas. Now another long term opportunity that we're investing heavily in is commerce, and this has become a lot more important as The pandemic has accelerated a broader shift towards businesses moving online. We're investing In building the future of commerce on our services, you know, we launched shops last year and we're creating more native commerce Capabilities across our apps with new tools to make it easier to buy and sell in WhatsApp and Instagram.
We're also building Some broader commerce infrastructure, everything from payments to customer service and and support. For business messaging, We're starting to see a meaningful shift in the way that people communicate with businesses. People want to get support and make purchases, And businesses want to be able to show their products and take orders and communicate with customers. And increasingly, they want to do all that through chat, and we're well placed to deliver Those types of services. We're focused on making our tools for business messaging across Messenger, Instagram, and WhatsApp more powerful and easier We're also going to be offering businesses a native way to manage their customer relationships on our platforms.
A fully featured commerce platform is gonna bring together, a lot of areas where we have strong offerings already, like in ads, Community tools and messaging, and it's gonna bring those together with areas like shops and business messaging and payments that we're working on ramping up now. We're also investing in, areas like customer support for our products, which I think is the next pillar of our trust and safety work. We have a long way to go there, but I'm optimistic that we're gonna be able to build out our commerce offering and create something that that people and businesses are going to find very valuable. And the last area that I want to touch on, today is creators. Our goal here is to support, the full range of human expression and to be the best platform for millions of creators to make a living.
So, We're focused on building out creative and monetization tools to support this overall creator economy. And Part of this is gonna be delivering tools and products for all the ways that people wanna create and consume content. And, you know, I I believe that, At the intersection of every media type, in every audience, there there is some compelling social experience to build. So we need to connect these experiences with with easy options for monetization for creators whether that's subscriptions, tipping, or, Enabling creators to give product recommendations and enable commerce. And with Instagram and Facebook, you know, we have a unique ability to bring creators and commerce together and And build something that, that's gonna be really useful here.
So across all
of these
areas, You know, there's a unique opportunity to help connect people in deeper ways and to support a stronger economy for everyone. And I'm optimistic that our work is going to help accelerate some of the positive emerging trends that we are seeing in the world. So thank you all for for being a part of this journey with us. I'm looking forward to making even more progress. And with that, I would like to open it up for questions.
Great. Thanks, Mark. And I'd now like to invite Sheryl Sandberg, Facebook's Chief Operating Officer Dave Wehner, Facebook's Chief Financial Officer and Nick Clegg, Facebook's Vice President of Global Affairs and Communications, to join Mark and answer some of your questions. We want to thank those who submitted questions in advance and during this meeting and we will try to answer as many questions as we can. We will start out with a set of questions that have been submitted in advance via the online meeting site.
Shareholders also have the opportunity to submit questions live during this meeting Our first question was submitted by Arash D. Can you please describe Facebook's plans for the future of Oculus and how it will contribute to the bottom line? Mark, would you like to take this one?
Sure. I can take that. So the key thing to understand about Virtual and augmented reality is that they are the technologies that help us deliver a sense of presence. Like you're right there with another person or in another place doing something, in in in a way that that just feels viscerally real. And From from that perspective, these are technologies that I thought about for a long time, as enabling The holy grail of social experiences, right, the ability for for you no matter where you are in the world, you know, to be able to put on glasses or put on a headset, And feel like you're right there with the people you care about or want to interact with.
I mean, this is just a huge step up From the kinds of experiences that we can have on screens today, and from that perspective, probably the main reason why why I'm excited about these Technologies is because of the ways that they'll make all the other products that we build and the all these social experiences that we've that we've wanted to build For, you know, since even before I started this company,
All
of that is gonna be possible and that's gonna be a big world that's gonna open up. And as that becomes possible, I mean, I I think that there's gonna be a big business opportunity here too. You know, the the playbook and the way that we tend to develop these things is to focus on delivering these really valuable social experiences first And at scale before focusing on on how that's going to benefit our business. And it's worked with our apps, we've, You know, there are billions of people who use our apps. You know, in most cases, you know, our apps Reached a 1,000,000,000 people or more before we really focused on, on, on what the business model and how we're going to, to make money around them.
And I think similarly With virtual and augmented reality, there will be opportunities through through app stores and payments and advertising and all kinds of different things To to make money along the way, but but I think, the main way that we're thinking about this is if we can enable new great social experiences at scale, Then that will over time, be an important part of our business and will, You know, if we reach the point where there are 100 of millions or billions of people using these devices, I just think that that's going to be an extraordinary opportunity for us.
Great. Thank you. Our next question was submitted by Mark P. Does the announcement of live audio rooms and shareable soundbites signal a shift away from Facebook's image and video driven strategy? If no, how will the integration of Sound help better monetize Facebook's existing platform?
Mark, would you like to take this one?
Yeah. Sure. I can take this one. You know, I think people want both audio and video. So I don't think that you should see this as a shift away from video or a shift away from photos or anything Like that, this is audio has emerged as a as another 1st class, type of medium that, The people want to want to interact with and there are a lot of good reasons why people like audio.
I mean from a creation side, it's much easier to set up You don't have to get dressed and make sure that your background looks good or or or that you have makeup on or what whatever Whatever it is there, and and from a consumption perspective, you know, a lot of times we listen to music or audio in the background while we're doing something else whereas video sort of demands, your entire attention. So I think that there's a big space for both of these and we're already, You know, one of the leaders in developing, VoIP calling, so so audio, you know, through WhatsApp and through Messenger Is, you know, already one of the the big experiences that people do through our product. So it's not like we're we're completely new to audio, but, But this is an area that I think it makes sense to extend and it's also gonna be a big part of the creator economy where you have creators and public figures, You know, increasingly a lot of journalists, or bloggers, you know, couple subscription offerings that have, You know, blog or newsletter with a podcast and you'll be able to offer the full range of how people want to express themselves and build business models for Creators, I think it's going to be valuable as well.
So I know there are a lot of ways in which, you know, this this ties into how people wanna, I want to create content and consume content online and I'm really excited for the offering that we're going to be rolling out here.
Great. Thank you. Next, we'll take a question that was submitted anonymously. A number of shareholder proposals seek to deal with ongoing content moderation, platform abuse and threats to the safety of Facebook users and integrity of the platform. Current proposals aside, what kind of continuing investments is the company willing to make to ensure that safety, security and integrity are core and essential functions of the business?
And Mark, would you like to take this one as well?
Yeah. Yeah. I can take this one too. It's, You know, we have a large and very talented team working on these issues. You know, We have about a 1,000 or maybe even more people working on the AI and engineering systems to help us identify In every different type of harmful content from the worst types of things like child exploitation, terrorism and incitement of violence To other categories like, nudity or intellectual property violations, I mean, there are about 20 categories of harmful content that we track and build specific systems to address and on top of the A 1,000 or so technical staff, who work on this.
We also have about 35,000 people, who work in content review and other Areas of our operations who are focused on helping to review and Detect and in some cases remove harmful content as well. So this is is certainly a big a big part of what we do. The leader of this is on our executive team and it is a key member of my team and You know, I've been proud of the progress that we've made here which we outlined in our transparency reports that we issue. But there's also a lot more to do and we're going to continue investing on this for years to come.
Great. Thank you. And next, we'll take another question that was submitted anonymously. Are there written or unwritten policies in place that decide Who or what gets censored and what does not? What policies or guidelines are in place to ensure that the process is fair to the left and the right politically?
Does it seem odd that it's perceived to be in one direction only? Nick, would you like to take this question?
Yes, sure. Happy to. I mean to be clear, we absolutely do not suppress content on the basis of political viewpoint. We always strive to Enforce our policies evenly without regard to the political affiliation of those affected. And that's because Facebook is an open platform For voices across the political spectrum, we believe fundamentally in free expression and the right of voters to hear what politicians are saying, The good, the bad, the ugly, so that they can be held to account.
Now, of course, that doesn't mean that politicians can just Say things that clearly cause harm and our policies on hate speech, incitement and so on apply to everyone regardless of their position of power. And those rules, our rules are set out in our community standards and they're available publicly and in considerable detail. So we've been very clear, we remove content that poses specific harm to people, content intended to Intimidate, exclude or silence. Inevitably perhaps, we get criticized By both sides of the political equation, certainly in the U. S, many Republicans accuse us of bias for taking action On content that breaks our rules and many Democrats say we should be going further to restrict the same content.
But we go to great lengths to allow debate from across the political spectrum on our platform as long as it doesn't violate Our community standards. And of course, we also created the Oversight Board to make independent judgments on some of the biggest content decisions we make, Which is why, for instance, we referred our decision to suspend President Trump's accounts, then President Trump's accounts to it. Of course, in an ideal world, it would be better if these decisions were made according to frameworks agreed by Democratically accountable lawmakers, but in the absence of such laws, there are decisions that we cannot duck And we will continue to enforce those decisions as fairly as we can.
Thanks, Nick. Our next question was submitted by Jessica C. There should be more diversity within this company. Many different people use Facebook and are also invested in Facebook, not just one race of people. And I do not see this in the Board of Directors or in higher up positions.
This needs to change soon. It's a very important issue that needs to be addressed. Cheryl, would you like to take this question?
Yeah, I can take that. So we're proud that the majority of our directors are diverse in terms of gender and ethnicity and LGBTQ status. And I agree with you that this area is super Important. You know, DNI is a lot area I've spent a lot of time on. We've elevated our DNI functions so our Chief Diversity Officer, Maxine, reports directly to me And is in the meetings at the highest level of the company.
And we want to ensure that DNI is at the very center of everything we do and in every decision we make. You know, over the past many years, we Facebook's grown a lot and our approach has changed a lot, but we know we still have a tremendous amount to do. And we've committed to 50% of our workforce will be underrepresented communities by 2024. And that means women, We put out our diversity numbers publicly every year and we announced our 7th one in July 5th on July 15th. And where where that shows is that we're continuing to see incremental And there are some things in there I'm really proud of.
Since 2014, we've increased the number of black women at Facebook by 40 times and the number of black men by 15 times and the women in technical roles has improved to 24%. That's a really big deal because we were at 15% before and unfortunately, women only get 19% of the CS they need to freeze Which means it's hard. It's really been hard to get to those numbers. It's also the case that the majority of our new female leaders were internally promoted, which means that we are Hiring people and growing them into bigger jobs. But since we have really ambitious goals, in order to get there, we're gonna need to Continue focusing on recruiting.
We use a diverse slate approach in the US. And when we start recruiting in new cities, We are able to get to pools of more diverse talent from new hubs like Atlanta. We've also done salary reviews for many years where we pay make We're paying men and women fairly. And we have a great pipeline of students coming in. We have a Facebook University program where we take Kids who could study computer science but are not currently studying computer science, bring them to be a summer intern with us And our goal is to encourage them to change majors and go into those fields and that's been very successful And we have a pipeline over 1,000 students who have participated in that program.
In order to get it right, we're going to have to continue to work hard, and we know that, and we will.
Thank you, Sheryl. Next, we'll take another question that was submitted anonymously. When will you start paying a dividend? And do you anticipate a stock split in 2021? Dave, would you like to take this one?
Yeah, sure, Jennifer. Thanks for the question. At this time, we don't have plans to initiate a dividend or Our priority Lots of opportunities ahead like Facebook, Bali Labs, Commerce and Business Messaging. We do think we have the ability to invest in growth while also generating a healthy amount of cash flow and we see an opportunity to deploy a percentage of that In January, we received an incremental share repurchase authorization From the Board of $25,000,000,000 and notably we stepped up our share repurchases in the Q1 to $4,100,000,000
Okay. Thank you, Dave. Next, we'll take another question that was submitted anonymously. Could you throw light on Facebook's strategy to launch new businesses beyond online advertisements and the associated launch timeframes? In a similar vein, Mark, would you like to take this question?
Sure. I can take that. So there are a number of areas That we're working on that we see is pretty, exciting opportunities both Supporting the Ads business that we have as well as potentially growing in new areas. And The 2 that I've talked about the most including on this call so far are around commerce and around future computing platforms. And the commerce efforts, while they're connected to ads In in a lot of ways because, you know, now you'll be able to enable the experience where if someone clicks on an ad And instead of having to go to some other website that may lose context about who they are, may not be able to be personalized, may not have their their payment credentials on file, That'll kind of all all be an in line native experience.
It'll be seamless and you'll be able to see the other inventory from that that business and and so on. That both makes the ads experience better. It makes the ads perform better for businesses, but then also Enables a lot more commerce activity within our services. So I mean, that's one really interesting area. And then of course, all the work that we're doing on the next computing platform So we're on virtual and augmented reality.
You know, big part of what we're doing there is is, you know, Not directly, advertising and that people are buying, devices, they're buying apps and And content, to to experience all the devices, those are, You know, obviously different types of business than what we're doing in our core business today. Even though over the long term, I think for both Commerce and In the future computing platform work, I think, you know, enabling, you know, our services to extend into these platforms and enabling The business model that we have now is is one thing that I think will benefit long term as well. So it's there's a lot of exciting opportunity both for the the the growth,
Thanks, Mark. We'll take next another question that was submitted anonymously. Many of us wonder why there's no way to communicate or plead a case when people on Facebook are blocked from participating on Facebook. Facebook should provide a way for people to communicate their concerns if they disagree with Facebook's decisions when someone is or when someone is punished for something that Facebook says goes against its community standards. Will you do anything to correct this?
Nick, would you like to take this question?
I'll take it, of course. There are ways for people to appeal our decisions. We remove content if someone posts something that violates our community standards or Instagram's community guidelines, but we also notify people So they better understand the reason behind the removal. And in enforcing all of that, we use a strike system. So that means that We might restrict or disable someone's account depending on which policy the content violated, the person's history of Previous violations and the number of strikes on their account.
And we give people the chance to appeal when we remove their content or their account, And they can do it right on the app. And the exception of course, there are exceptions. If we remove their account for a really egregious violation Like breaking up child exploitation or dangerous organizations' policies, for instance, there's no appeal for those. But for In almost all other instances, there is a right of appeal, and that can be done on the app. That said, during the pandemic, Our review operations have been affected, and one of those areas was our appeals Capacity.
Now we've worked hard to restore that capacity, but as long as the pandemic continues to have a serious global impact, it's possible It will continue to be affected for a while. So at the moment, as a temporary measure and as long as this operational disruption continues, We're giving people the option to tell us that they disagree with the decision. And in many cases, we are re reviewing those You know, where people disagree with the decision, as we would a typical appeal. And we've also, of course, set up the Oversight Board, as I mentioned in a previous question answer to a previous question, which gives people another way to appeal content when they believe they've gone as far as they can with Facebook's appeals process. And people can appeal content they think that has been left up or taken down incorrectly and the Oversight Board's decisions are entirely binding On Facebook.
Thank you, Nick. Next we'll take another question that was submitted anonymously. Privacy is a topic of growing importance to American society. Many would like the U. S.
To move towards a European model for privacy regulation. What would be the impact to Facebook in terms of the financial, product and brand experience if the regulatory environment successfully moved in that direction? Is there a middle ground that Facebook would find acceptable and where would that be? Nick, would you also like to take this one?
Yeah. I mean, not only do would we find it acceptable, we strongly believe the US needs a comprehensive privacy law. We've been calling for A comprehensive privacy legislation for some time because we think it will benefit people by providing consistent protections right across the country And of course, we'll benefit businesses by giving them the certainty that they need to operate too. And consumers should have a right To access, correct and delete their data, move their data to other services and opt out of its sharing for certain purposes. We believe that any comprehensive federal approach to privacy should enshrine these rights and require Corresponding accountability for businesses such as ours as well as resources which need to be allocated to government agencies tasked with The enforcement of the privacy legislation.
And while we believe that federal legislation is the optimal solution for people and businesses, We that hasn't stopped us from supporting state legislation, including Virginia's Consumer Data Protection Act, Well, we think that makes sense. And the key for us in the long run, of course, is that any privacy laws evenly applied across geographies. So Virginia's law, for instance, provides strong protections, but it does so in a way That is pretty familiar to businesses and people that have been used to compliance with GDPR and similar laws. And of course, whether in the U. S.
Or in the EU or elsewhere, our view is that any privacy legislation can and should be Careful about restricting should we avoid restricting innovation or the ability of companies to advertise online because we don't think that Personalized ads and privacy are at odds. We believe we can have a regulatory framework that supports both.
Thank you, Nick. Our next question was submitted by Ed T. How can Facebook leverage and possibly become a leader in crypto? DeFi, smart contracts, and NFTs are here to stay. Many people talk about Bitcoin, but Ethereum and its blockchain are more disruptive and valuable to businesses like Facebook.
Mark, would you like to take this question?
Sure. I can talk about this. So it's definitely the case That adoption and interest in Blockchain Technology continues to grow. And, You know, I think it's an exciting space and it's gonna have, I think a lot of implications for for a number of areas of economic opportunity in in different apps You know, digital currencies and cryptocurrencies are one example of how this new technology can be leveraged. You know, we believe that they can certainly play an important role in bringing financial Services and financial inclusion to more people.
And this matters to us and then what we do because when when people Have access to financial tools, then they're more empowered to be able to support themselves and others and or start a business and, You know, a lot of what we do is about is about empowering people to start businesses and and and to support small businesses. We've also been We have been involved in, in creating products to support digital currencies, for a couple of years now. You know, when we came together with a group of other companies to to help Start, what is now called the DM project, which is is independently led by the DM Association. And, when we introduced the Novi digital wallet, it's, it will it will offer people Access to DM Digital Currencies, to start. And, you know, we're we're exploring a number of ways that we can further Support the growing adoption of these tools and provide people and businesses With all the tools that they need to support, and achieve their different financial goals.
So overall, yeah, I think this is an exciting area and one to watch.
Thanks, Mark. Next, we'll take a question submitted by Oliver C. Is there any plan to create a real structure to manage Nick, would you like to take this one?
Yes, happy to because it's important to Remember, we really are committed to fighting wherever we can the spread of false information on Facebook. We remove content that violates our community standards, As I said earlier, and we reduce distribution of stories which are marked as false, and we inform people, Try and inform people so that they can decide for themselves what to read, trust and share. We work with more than 80 3rd party fact checking organizations around the world, I think it's by some measure the largest fact checking System established by any social media company covering over 60 languages. And when they rate something as false, we dramatically reduce The distribution of the content they've rated as false. And we also show warning labels to people who see that post or try to share it or already have.
So for instance, from March last year through to the middle of October last year, we displayed warnings on nearly 170,000,000 pieces of content viewed on Facebook from the U. S. So that gives you some sort of feel of the scale of this. And we use both technology and human review to remove fake accounts, promote information literacy and disrupt the financial incentives Since we're still obviously in this COVID pandemic and there's a lot of Legitimate focus on pandemic related misinformation. We've removed more than 18,000,000 pieces of content From Facebook and Instagram with false claims about COVID and false claims about vaccines that leading health organizations like the World Health In news feed, remove them from the recommendations we show to people.
And in some instances, we may even remove them From the app altogether.
Thank you, Nick. We have time for one last question, And this question was submitted anonymously. When are we going to become more user focused, specifically when users submit concerns about their accounts, Marketing overload, etcetera. Mark, would you like to take this one?
Sure. I can talk about this. You know, as I mentioned upfront, customer support is going to be an increasing focus for us. And For the last several years, you know, our team that has been been focused on on on kind of Trust and safety overall has been more focused on content moderation, right? So making sure that we can identify harmful content and take it down And also, working on making sure that we continue improving privacy And supporting and providing world class controls there.
But those are different problems than customer support. And in fact, a lot of the time, When you're focused on content moderation and, and and more proactively identifying harmful content That can lead to, experiences where you're taking content down from people, who disagree that it should be taken down and and and it could, Those two things between content moderation and customer support are often at odds. So now recently we've started a new Company wide effort for for customer support to make sure that we also improve the support experiences, That people in businesses receive when using our services and we know that this is going to be the next pillar of our work in trust and safety. We were standing up a very big effort to improve it. Just like the work on Content moderation and integrity, we have a multi year roadmap.
It's gonna take a while to really get to the state that we want to be in, but I have confidence in the team We will get there and this is certainly going to be a big focus over the next several years.
Thank you, Mark. And that concludes our Q and A session. Thanks for attending Facebook's Annual Meeting of Shareholders, everyone. We'll see you next year.