Activist, John Chevedden pushed for Google to change its capital structure to give all shares an equal vote. Most of us own Class A stock with one vote per share. But Google co-founders Larry Page and Sergey Brin, along with Chairman Eric Schmidt, control about 64% of the votes through Class B stock with 10 votes per share.
Chevedden argued the current system allows Google to use shareholders’ capital without giving them the power to hold management accountable for how they run the company. Most shareholders agree with his assessment. Consider the fact that Google insiders control about 70% of votes.
Votes for: 180,758,723
Votes against: 551,282,594
Broker non-votes: 26,365,754
If Google insiders voted all their shares in favor of management recommendations, as suspected, then nearly 80% of outside Google shareholder votes supported Chevedden’s proposal. The vast majority of average shareholders support equal voting rights but insiders control the game. Eventually, that could be very problematic if insiders make the wrong moves. If anyone can push though this unmovable situation, it is Chevedden… who has filed more successful proxy proposals than anyone in history. Expect him to keep pushing until he is successful. I suspect that resistance may be futile, even for Google.
See the full analysis by M. Joy Hayes at Average Shareholders Likely Oppose Google’s Dual-Class Voting Structure, The Motley Fool.
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