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CommentThe company already has a dual class share system, with the founders’ stock holding 10 votes per share.
That currently gives Google’s power trio 66% of the voting power over the company’s shares, according to a recent regulatory filing.
In a letter to shareholders released late Thursday, the company’s co founders said they’re concerned that day to day dilution from stock grants and acquisitions will undermine that structure.
"So we want to ensure that our corporate structure can sustain these efforts and our desire to improve the world.
"Google has recently come under attack from some investors for spending too freely on far off projects like space elevators and driverless cars and lacking a winning social networking strategy.
The company has repeatedly urged patience, noting that many ideas will fail, but many more will — and have — become huge revenue drivers, including display and mobile advertising, as well as Google’s $1.65 billion YouTube purchase in 2006.
The new stock structure, which gives Google’s leaders significantly more power than its shareholders, won’t be popular with corporate governance advocates.
Edward Ketz, an accounting professor at Pennsylvania State University, criticized the "peculiar" move.
"Benevolent dictators might lead to efficient government, but once they lose some of the benevolence, things can turn nasty," he said.
"Google’s shareholders will vote on the measure at its annual meeting on June 21.
In a sentence that sums the whole maneuver up, the company said: "Given that Larry, Sergey, and Eric control the majority of voting power and support this proposal, we expect it to pass.
"How it worksWhen Google’s stock splits, its per share price will be cut in half.
For each share they currently hold, existing shareholders will recieve one "class A" share with voting rights and one "class C" share with no voting rights.
It also plans to file regulatory paperwork next week describing its proposal in more detail.
Google offered a few additional specifics in a memo sent to its employees about the stock split, a copy of which was also filed with the Securities and Exchange Commission.
A solid quarterGoogle proved last quarter that its strategy continues to pay off.
The world’s online search leader said its net income in the first quarter rose to $2.9 billion, up 61% from a year earlier.
Results included one time charges, including its $500 million settlement with the Department of Justice over advertising violations.
Analysts polled by Thomson Reuters, who typically exclude one time items from their estimates, had forecast earnings of $9.65 per share.
Google’s social products chief, Vic Gundotra, said Wednesday that more than 170 million people have "upgraded" to Google+, but that count includes visitors to Google sites that have been tied into the social network, including YouTube and Picasa.
Profit rose as the number of clicks on Google’s ads grew, while the amount that advertising partners pay per click dropped: Paid clicks rose 39%, but the cost per click decreased by 12% compared to last year.
Google’s costs also continued to soar, after the company continued its hiring and spending spree.
The search giant upped its headcount by 2% and spending $600 million on new infrastructure.
The company reiterated that it expects to continue to make "significant" capital expenditures going forward.
Excluding advertising sales that Google shares with partners, a figure also known as traffic acquisition costs, the company reported revenue of $8.1 billion, which matched analysts’ forecasts .
Adrian Zuckerberg is a business journalist based in Sydney, Australia. Adrian has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Adrian spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.
