Google Inc. (Alphabet Inc.) | Equal shareholder voting at Google Inc. (Alphabet Inc.)

Status
31.33% votes in favour
AGM date
Previous AGM date
Proposal number
9
Resolution details
Company ticker
GOOGL
Lead filer
NorthStar Asset Management, Inc.
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Technology
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders request that our Board take all practicable steps in its control to initiate and adopt a recapitalization plan for all outstanding stock to have one vote per share. We recommend that this be done through a phase-out process in which the board would, within seven years or other timeframe justified by the board, establish fair and appropriate mechanisms through which disproportionate rights of Class B shareholders could be eliminated. This is not intended to unnecessarily limit our Board’s judgment in crafting the requested change in accordance with applicable laws and existing contracts.
Supporting statement
SUPPORTING STATEMENT: In our company’s multi-class voting structure, Class B stock has 10 times the voting rights of Class A. As a result, Mr. Page and Mr. Brin currently control over 51% of our company’s total voting power while owning less than 12% of stock – and will continue to retain voting control even though they have stepped down from leading the company.



Due to this voting structure, our company takes public shareholder money but refuses shareholders an equal voice in the company’s management. For example, it was primarily the weight of the insiders’ 10 votes per share that permitted the creation of a non-voting class of stock (class C) even though most shareholders voted to oppose the move.



In another example, shareholders note that directly-employed Google workers are partially compensated in Class C stock. Google’s compensation philosophy states that “Googlers should share the success of the company,” but without voting rights, these employee-shareholders cannot exercise oversight of executives and find themselves subject to repeated layoffs, outsourcing, and interference with their freedom of association. Moreover, Google hires tens of thousands of contracted workers who have even less say over their indirect employer’s actions. This lack of worker voice can only depress employee performance and innovation.



A variety of corporate governance experts illustrate a growing concern about multi-class share structures:



• The Council for Institutional Investors (CII) recommends a seven-year phase-out of dual class share offerings. The International Corporate Governance Network supports CII’s recommendation “to require to a time-based sunset clause for dual class shares to revert to a traditional one-share/one-vote structure no more than seven years after a company’s IPO date.”
• The International Corporate Governance Network supports CII’s recommendation “to require to a time-based sunset clause for dual class shares to revert to a traditional one-share/one-vote structure no more than seven years after a company’s IPO date.”
• The Investor Stewardship Group recommends that “shareholders should be entitled to voting rights in proportion to their economic interest” and “boards should have a strong, independent leadership structure.”
• As of October 1, 2023, Institutional Shareholder Services (ISS), which rates companies on governance risk, gave our company a 10, its highest risk category, for the Governance QualityScore.


Shareholders are encouraged to vote FOR this good governance request to allow better shareholder oversight.

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
Rothschild & co Asset ManagementFor
EdenTree Investment Management LtdForAlphabet's multi class structure, whereby common shareholders carry less than half of the voting rights while bearing significantly more of the economic risk, has been destructive to the shareholder experience in recent years. When the company went public in 2004, Larry Page and Sergey Brin shared in their Founder's IPO Letter that this structure would enable them to pursue their long term vision for the company without short-term pressure. After 20 years and no sunset-clause, we believe the benefits of this structure have long since expired.

In the letter, they also state "if opportunities arrive that might cause us to sacrifice short term results but are in the best long term interest of our shareholders, we will take those opportunities." Yet in contrast to this commitment, the concentration of voting powers has resulted in a decision-making process that discounts the long-term interests of common shareholders in favour of those belonging to affiliated individuals. The extent of this agency imbalance may suggest the board's fiduciary duty does not fully extend to the heterogeneous interests of common shareholders, further evidenced by failures to implement proposals with majority support from unaffiliated voters.
Kutxabank Gestion SGIIC SAU.For

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