Google announced a stock split that will give the founders more control over the company.
April 13, 2012- Google announced a stock split on Thursday, but it was not one that was anywhere near ordinary in nature. The company wants to give shareholders two shares for each share they currently own. That part at least is quite ordinary.
However, Google wants the new shares that are given to shareholders to hold no voting rights. What the stock split essentially does is it gives Chairman Eric Schmidt, CEO Larry Page and Sergey Brin a co-founder, additional voice over the management decisions made by the company.
The company presently has a dual-class system for stocks, with founders’ stock having 10 votes per each share. That gives the three in power at Google 66% of the voting power. On Thursday, the company sent a letter to stockholders that said the co-founders of the company are concerned the dilution of their stock due to acquisitions and stock grants will help to undermine the structure of the company.
Brin and Page said in the letter that they had put everything into Google and were planning on doing so for many years more. Therefore, they want to make sure the corporate structure works going forward.
Some investors have attacked Google for spending too much on projects they consider to far-off. Projects investors are upset about include a driverless car and space elevators. Investors have also complained the company lacks a winning strategy for social networking.
The new stock measure will be voted upon at the company’s annual meeting that will be held June 21.
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