As mentioned in the company's Q1 earnings statement today, Google is working on a new stock structure that will effectively amount to a 2-for-1 split: existing shareholders will receive one share of a new non-voting class for each share they presently own — and this year's Founders' Letter from Larry Page and Sergey Brin is focused on defending the move. Much of the defense rides on a reference a similar letter from 2004 — around the time of the company's blockbuster IPO — which defended the decision at the time to give the pair enormous voting power with a special share class offering ten times the number of votes per share of the common stock traded among most investors. Today's maneuver seeks to tighten Page and Brin's grip on Google's destiny by putting shares without any voting power into the public domain:
We recognize that some people, particularly those who opposed this structure at the start, won't support this change-and we understand that other companies have been very successful with more traditional governance models. But after careful consideration with our board of directors, we have decided that maintaining this founder-led approach is in the best interests of Google, our shareholders and our users. Having the flexibility to use stock without diluting our structure will help ensure we are set up for success for decades to come.
That said, they also note that there's no particular "urgency" to this move, noting that they "don't have an unusually big acquisition planned, in case you were wondering," but that there wasn't any good reason to delay it, either. The paperwork will be filed with the SEC next week, they say, and voted on at Google's annual shareholder meeting on June 21st — and considering the company's existing voting structure with Page, Brin, and Schmidt in almost full control, the measure is expected to pass without a problem.