Administration

Mass. Pension Sues Google Over Proposed Stock Split

May 1, 2012 (PLANSPONSOR.com) – Google, Inc. was sued by a Brockton, Massachusetts, pension fund that claims the company’s planned stock split would unfairly create nonvoting shares.  

By Tara Cantore editors@plansponsor.com | May 01, 2012

The Brockton Retirement Board contends that officials of Google failed to act in the best interests of shareholders in creating a  new class of stock, according to Bloomberg.

In the complaint filed in a Delaware Chancery Court the Fund stated, “The reclassification effort is a thinly veiled attempt to entrench” co-founders Larry Page and Sergey Brin as dominant shareholders of Google by creating a nonvoting class of Google stock in order to preserve their voting power into perpetuity.” 

Google now has Class A common shares, which have one vote each, and Class B shares, mostly held by the founders. Under the reclassification, all shareholders will receive a dividend of new, nonvoting Class C stock in what amounts to a 2-for-1 stock split, according to the complaint.

The Brockton fund asked a judge to block the new stock plan and award unspecified compensatory damages, reports Bloomberg.

 

 

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