Facebook (FB) - Get Report closed the book on an unflattering chapter in its history with an announcement on Wednesday morning that it reached a settlement with the Federal Trade Commission (FTC) to pay a $5 billion penalty -- the largest civil fine by far ever imposed by the FTC -- and make significant changes to Facebook's board. 

Specifically, Facebook must establish a special privacy committee accountable to Facebook CEO Mark Zuckerberg, who also serves as chairman of Facebook's eight-person board. In its announcement, the FTC said that the new committee would remove the "unfettered control by Facebook's CEO Mark Zuckerberg over decisions affecting user privacy."

Facebook shares were down 0.94% to $200.46 in morning trading on Wednesday. The company had announced in its first-quarter earnings call in April that it had set aside $3 billion to settle the case and expected the final fine amount to be as much as $5 billion. Facebook reports its second-quarter earnings on Wednesday after the close. 

The FTC voted 3-2 along party lines in favor of the settlement, which still must be approved by a court. 

In a blog entry about the settlement, Facebook said that "the agreement will require a fundamental shift in the way we approach our work" and vowed to be more transparent and accountable in terms of how it handles user data. 

"We will be more robust in ensuring that we identify, assess and mitigate privacy risk. We will adopt new approaches to more thoroughly document the decisions we make and monitor their impact. And we will introduce more technical controls to better automate privacy safeguards," Facebook wrote in its post.

The FTC had reportedly considered imposing a penalty on Zuckerberg personally as part of the settlement. Instead, naming Zuckerberg as the executive in charge of the committee is a way to put him personally "on the hook" for data oversight without requiring a more drastic shakeup that shareholders may not favor, according to Peter Rokkos, an attorney and instructor at Rutgers University specializing in corporate governance. 

The settlement dictates that Zuckerberg and designated compliance officers will have to certify quarterly and annually that Facebook is complying with the privacy program, and any false statements will subject them to individual civil and criminal penalties. The FTC said that these compliance officers will be subject to the approval of the new privacy committee and can only be removed by that committee, and not Facebook's CEO nor other Facebook employees. 

"From Facebook's perspective -- similar to [Tesla's SEC settlement in September 2018], they're [cutting] a deal that reflects that shareholders like Musk or Zuckerberg being in charge," he said.

Also on Wednesday morning, the Securities and Exchange Commission announced that Facebook had agreed to pay $100 million to settle charges that it had misled investors regarding the risk of misuse of Facebook user data.

For investors, news of the settlements likely represents some closure from the Cambridge Analytica scandal, which was reported in March 2018 and ultimately led to a substantial slide in Facebook's stock in the latter half of 2018. Between late July 2018 and the end of the year, Facebook shares shed roughly 40% of their value after the company disclosed heavier spending on privacy and security measures in the wake of the data misuse scandal. 

The FTC's investigation of Facebook had focused on whether Facebook's mishandling of user data represented a violation of a 2012 consent decree that required Facebook to institute tighter controls over its users' personal data. 

While the deal may cheer Facebook's shareholders, it may be overly optimistic to expect that the committee itself will shake up how business is done at Facebook, Rokkos added. 

"It makes an investor actually pretty happy to tuck this into bed," he said. "I'm pretty skeptical that this, in it of itself, is going to make any meaningful changes at the company." 

Shares of Facebook are up more than 50% year to date.

Facebook is a holding in Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells FB? Learn more now.