Monday, March 14, 2011

"Public" Google

My friend Anupam has been reading the Google 10-K and finds nuance in the notion of "public" company:
Our Class B common stock has 10 votes per share and our Class A common stock has one vote per share. As of January 31, 2011, Larry, Sergey, and Eric owned approximately 91% of our outstanding Class B common stock, representing approximately 67% of the voting power of our outstanding capital stock. Larry, Sergey, and Eric therefore have significant influence over management and affairs and over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or our assets, for the foreseeable future. This concentrated control limits our stockholders’ ability to influence corporate matters and, as a result, we may take actions that our stockholders do not view as beneficial. As a result, the market price of our Class A common stock could be adversely affected. 
Others point out that Google is hardly unique; nobody thinks of Berkshire Hathaway as anything but Warren Buffett, and the Ford family still controls "public" Ford. 


Ken Houghton said...

One of these days, someone people listen to is going to point out that Ford's ownership structure is the primary reason the company eschewed the "bailout" money.

Buce said...

Well, that plus the fact that they had quite a war chest, not so? Steve Rattner offers some interesting thoughts in his book about the auto bailout (which is a very good read, even if special pleading).