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

Abstract

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

Wong, Simon C. Y., Google's Stock-Split Plan Would Replace Stewardship with Dictatorship (April 27, 2012). Harvard Business Review Online, April 2012. Available at SSRN: https://ssrn.com/abstract=2043499

Simon C. Y. Wong (Contact Author)

Northwestern University School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States

London School of Economics

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://www.lse.ac.uk/collections/law/staff/simon-wong.htm

Tapestry Networks ( email )

404 Wyman St.
Suite 225
Waltham, MA 02451
United States

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