Page was especially concerned that co-founder Sergey Brin and then-executive chairman Eric Schmidt would sell special voting stock, according to documents from a pending shareholder lawsuit about C-class shares issued to investors in 2014. Doing so would have diluted the founders’ decision-making power, lessening Page’s control over the company. In 2012, the company said the C-class stock could be used for acquisitions and employee equity grants without diluting founder control. However, the documents suggest the original motivation could have been Page needing to keep his control over the company, even if Brin sold his voting stock. (Bloomberg)
Talking point: Google’s IPO in 2004 set the framework for founder control over public tech companies today. Companies like Facebook and Snap have used similar methods of super-voting stock to get significant cash flow from investors, while still allowing original founders to keep decision-making power. They argue that this structure helps them focus on long-term strategy, instead of prioritizing quarterly results to appease Wall Street. But it also leaves room for less accountability if things go astray—for Google, that allegedly happened in 2018 when the company gave Andy Rubin a US$90-million exit package after an inappropriate relationship with a subordinate. Page allegedly gave Rubin a large stock award which the company’s directors later approved, but didn’t have much input on because Page, Brin and Schmidt still had voting control, according to a recent lawsuit.