New York - Larry Page and Sergey Brin on Thursday moved to strengthen their control over Google, the search-engine giant they founded 16 years ago, complaining that the company could one day fall under the influence of short-termist investors.
In a plan that flouted corporate-governance conventions, but which the founders cast as a natural extension of a policy long accepted by Google shareholders, the company said it would start using a new class of shares stripped of voting rights.
That way, Messrs Page and Brin's voting power will not be diluted over time, as the company issues stock to employees and as payment for future acquisitions, they said.
The pair already have 58 percent of the votes at shareholder meetings, despite owning less than 17 percent of the company, because most of their shares have 10 times the voting rights of newer stock.
In a letter to shareholders, the founders defended their outsize power, saying they had been clear about it when the company went public in 2004, and believe it is as important as ever.
“We have put our hearts into Google and hope to do so for many more years to come,” they wrote.
The complex plan to retain their voting control well into the future involves issuing new, non-voting shares, which will be distributed to holders of existing shares on a one-for-one basis in the coming months. It is the equivalent of a stock split, the company said.
“One of the values of Google is that Larry and Sergey know best,” said Whit Andrews, analyst at Gartner. “Wall Street is certainly very happy, and this is the time for them to say: 'We're glad you are happy with us and we'll try to get money back to you. Trust us.'“
The share scheme was announced on Thursday alongside Google's latest quarterly financial results, showing a profit of $2.89bn - a 60 percent jump. - The Independent