Google Shareholder Proposal to Resist Censorship

buxton2k writes "Slashdot has had plenty of stories about technology companies like Google kowtowing to repressive political regimes such as China's. I'm an (extremely) small shareholder in Google, and I looked at their proxy statement today. Most of the time, shareholders' meetings don't deal with anything other than rubber-stamping the board of directors, but Google's upcoming meeting has a interesting shareholder proposal dealing with free speech and censorship to be voted on at the May 10 meeting."

Comments

Re:Maybe I can start to trust Google again?

[bernywork]

This was raised by a shareholder, in particular:

The Funds' request was submitted by Patrick Doherty, The City of New York Office of the Comptroller, 1 Centre Street, New York, New York, 1007-2341

Didn't the directors suggest a no vote?

Required Vote

Approval of the stockholder proposal requires the affirmative "FOR" vote of a majority of the votes cast on the proposal. Unless marked to the contrary, proxies received will be voted "AGAINST" the stockholder proposal.

Recommendation

Our board of directors recommends a vote AGAINST the stockholder proposal.

Google doesn't care what its shareholders think

[jalefkowit]

... because they don't have to.

When the company IPOed, they issued two classes of stock: one that you could buy (Class A), and special shares for Sergey Brin, Larry Page and Eric Schmidt that carry 10 times the voting weight of the shares available on the public market (Class B). The result is that anything that Brin (founder), Page (founder) and Schmidt (CEO) don't want passed can't be passed by a shareholder vote; ordinary shareholders simply don't have the voting muscle, even if they all voted together.

Google's rationale at the time was that this arrangement would free them from pressure to constantly be posting higher earnings each quarter. In their SEC filing, they included an unusual "Letter from the Founders" that defended the approach:

The main effect of this structure is likely to leave our team, especially Sergey and me, with significant control over the company's decisions and fate, as Google shares change hands. New investors will fully share in Google's long term growth but will have less influence over its strategic decisions than they would at most public companies...

Academic studies have shown that from a purely economic point of view, dual class structures have not harmed the share price of companies. The shares of each of our classes have identical economic rights and differ only as to voting rights.

Google has prospered as a private company. As a public company, we believe a dual class voting structure will enable us to retain many of the positive aspects of being private. We understand some investors do not favor dual class structures. We have considered this point of view carefully, and we have not made our decision lightly. We are convinced that everyone associated with Google--including new investors--will benefit from this structure.

(Emphasis mine)

It's hard to read the part about "retain[ing] many of the positive aspects of being private" as anything other than "we don't want shareholders telling us how to run our company". And given how the stock is structured, shareholders can't, unless they can win over one or more of the three top execs at Google to their point of view.