Google's Stock-Split Plan Would Replace Stewardship with Dictatorship
Harvard Business Review Online, April 2012
2 Pages Posted: 22 Apr 2012 Last revised: 7 May 2012
Date Written: April 27, 2012
Google recently announced that it would seek to cement its founders' control through the issuance of non-voting stock. In this commentary, I argue that while I am supportive of strong stewardship by Google's founders, its proposal would excessively entrench control and should therefore be rejected.
This article employs a comparative perspective, drawing on the trend in developed and emerging markets to eliminate or reduce the severity of multiple share classes. In addition, I distinguish Google's proposal from the discussions in the UK on granting long-term shareholders enhanced voting rights.
Keywords: Corporate governance, non-voting stock, multiple-share classes, entrenchment
JEL Classification: G32, G34
Suggested Citation: Suggested Citation