Google Inc.’s latest bid to preserve the control of founders Larry Page and Sergey Brin is raising concerns among corporate-governance watchdogs, who say the new stock structure cuts shareholders out of the loop.
Google unveiled a plan yesterday that lets the company issue new shares without diluting the founders’ voting power. The stock change would create a new class of nonvoting shares that will be distributed to existing shareholders in what is effectively a 2-for-1 stock split.
“We recognize that some people, particularly those who opposed this structure at the start, won’t support this change -- and we understand that other companies have been very successful with more traditional governance models,” the founders said. “But after careful consideration with our board of directors, we have decided that maintaining this founder-led approach is in the best interests of Google, our shareholders and our users.”