Updated: A move by Google stockholders to weaken the voting prowess of Google's big three goes down in flames. (eWEEK.com)There are only moral victories for those behind a proposal to significantly reduce the voting powers of Internet search giant Google's top three executives.
The issue was defeated at Google's shareholder meeting on April 11.
The Bricklayers & Trowel Trades International Pension Fund's idea—that buyers of any kind of Google stock get a single vote per share—was considered a long shot anyway. And that was the point to the whole exercise.
Read more here about how the 1/10 rule came about.
Under the current setup, owners of Class A Google shares, like the pension fund, get a single vote per share.
But Class B stock owners, a category which includes Google's top executives, get a total of 10 votes per share.
The 1/10 rule puts a lot of voting power unfairly into the hands of a few, the pension fund argues.
At Google, CEO Eric Schmidt and co-founders Larry Page and Sergey Brin get to cast 66.2 percent of all the votes, although they together own just 31.3 percent of the stock.
That means that without the top three's consent, any proposal is defeated. And as Google indicated here, the top three are against changing the 1/10 rule. So, it seems, game over.
The consolation prize here is knowing that if the votes were leveled, the proposal would have a good chance of passing, said Jake McIntyre, the union pension fund's assistant to the secretary-treasurer.
So in a way, by losing, the pension fund is proving its case.
"Even though there's a large number of outstanding shareholders [who] have some serious issues with dual-class share system, they don't have a choice," he said.
"Although we're well aware that the proposal is unlikely to win a majority vote, due to the existence of the very dual-class system we're seeking to abolish, we believe that the issue is important enough to raise."
Editor's Note: The story was updated to reflect that the challenge to the two-tier voting structure failed.
Read the full story on eWEEK: Stock Voting Rights Plan Hits Brick Wall at Google
