Google Play icon

Google settles suit, clears way for stock split

Share
Posted June 18, 2013
In this Sept. 2, 2008 file photo, Google co-founders Sergey Brin, left, and Larry Page talk during a new conference at Google Inc. headquarters in Mountain View, Calif. Google has settled a shareholder lawsuit to clear the way for a long-delayed split of the Internet search leader's stock. The agreement announced Monday, June 17, 2013, resolves allegations that Google co-founders Page and Brin engineered the stock split in a way that unfairly benefits them and shortchanges the rest of the company's shareholders. (AP Photo/Paul Sakuma, File)

In this Sept. 2, 2008 file photo, Google co-founders Sergey Brin, left, and Larry Page talk during a new conference at Google Inc. headquarters in Mountain View, Calif. Google has settled a shareholder lawsuit to clear the way for a long-delayed split of the Internet search leader’s stock. The agreement announced Monday, June 17, 2013, resolves allegations that Google co-founders Page and Brin engineered the stock split in a way that unfairly benefits them and shortchanges the rest of the company’s shareholders. (AP Photo/Paul Sakuma, File)

Google has resolved a shareholder lawsuit blocking a long-delayed stock split, clearing the way for the Internet search leader to issue a new class of non-voting shares later this year.

The settlement announced Monday came on the eve of a scheduled Delaware chancery court trial that threatened to cast an unflattering light on Google co-founders Larry Page and Sergey Brin.

The class-action by the Brockton Retirement Board in Massachusetts and another Google shareholder, Philip Skidmore, alleged that Page and Brin engineered the stock split in a way that unfairly benefits them while shortchanging the rest of the company’s shareholders.

Google denied the allegations and maintained that the proposed stock split announced 14 months ago would benefit shareholders by ensuring that Page and Brin would preserve the power that has enabled them to make the same kinds of bold bets on technology that has helped increase the company’s market value by more than $260 billion during the past nine years.

The split calls for a new class of “C” stock with no voting power to be issued for each share of an existing category of “A” voting stock. The structure is designed to ensure that Page and Brin retain control over the company, even though they only currently own about 15 percent of Google’s outstanding stock, combined.

Page, Google’s CEO, and Brin, an executive who oversees special projects in the company’s secret X Lab, hold 56 percent of Google’s voting power through a “B” class of stock that gives them 10 votes per share. By creating a new class of non-voting shares, Google will be able to keep rewarding other employees with more stock and financing potential acquisitions of stock without undermining the voting power of Page and Brin.

Read more at: Phys.org

Featured news from related categories:

Technology Org App
Google Play icon
86,181 science & technology articles

Most Popular Articles

  1. Scientists Reverse Dementia in Mice with Anti Inflammatory Drugs (December 5, 2019)
  2. NASA Scientists Confirm Water Vapor on Europa (November 19, 2019)
  3. How Do We Colonize Ceres? (November 21, 2019)
  4. Toyota Raize a new cool compact SUV that we will not see in this part of the world (November 24, 2019)
  5. Universe is a Sphere and Not Flat After All According to a New Research (November 7, 2019)

Follow us

Facebook   Twitter   Pinterest   Tumblr   RSS   Newsletter via Email