Google founders plan big stock sale

By Stacy Cowley, small business editor


NEW YORK (CNNMoney.com) -- Google founders Larry Page and Sergey Brin plan to sell off 5 million Google shares each over the next five years, a move that could see them surrender majority voting control over the company they created.

Google (GOOG, Fortune 500) has an unusual dual-stock structure. "Class A" shares are publicly traded on the Nasdaq exchange, while "Class B" shares are reserved for insiders and carry 10 times the voting power of other shares.

Brin and Page plan to dip into their deep reservoir of Class B shares, selling up to 17% of the 57.7 million shares they currently hold, according to a regulatory filing submitted Friday. Those sales would reduce their voting power over Google's stock from 59% today to around 48%, depriving them of majority control.

But CEO Eric Schmidt currently holds shares accounting for almost 10% of Google's voting power. Together, the trio would continue to control Google, as they have for nearly a decade.

"We run Google as a triumvirate," Page and Brin announced in an "owner's manual" included in Google's 2004 IPO filing. "The three of us run the company collaboratively with Sergey and me as presidents. The structure is unconventional, but we have worked successfully in this way."

Google created its two stock classes because of the founders' desire to keep control vested with their management team. It's a risk to shareholders that Google discloses routinely in its regulatory reports.

Schmidt, Page and Brin "have significant influence over management and affairs and over all matters requiring stockholder approval," the company wrote in its most recent annual report. "This concentrated control limits our stockholders' ability to influence corporate matters and, as a result, we may take actions that our stockholders do not view as beneficial."

Page and Brin's stock selloff will take place through gradual, pre-arranged sales over the next several years. Such trading plans are commonly used to diversify the portfolios of executives with significant holdings in their own company stock.

Google's stock closed Friday down 6%, at $550.01 per share. At those prices, Page and Brin would each fetch $2.75 billion from their stock sales. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,576.03 -304.33 -1.80%
Nasdaq 4,368.03 -94.87 -2.13%
S&P 500 1,931.66 -38.41 -1.95%
Treasuries 2.56 0.00 0.08%
Data as of 3:28pm ET
Company Price Change % Change
Micron Technology In... 30.58 -1.95 -5.99%
Bank of America Corp... 15.29 -0.29 -1.86%
Apple Inc 95.85 -2.30 -2.34%
Facebook Inc 72.70 -1.98 -2.65%
General Electric Co 25.21 -0.43 -1.68%
Data as of 3:13pm ET

Sections

TD Bank surprises customers on camera and the video goes viral on YouTube, with more than 3.8 million views in one week. More

With RadioShack burning through cash, investors and credit rating agencies believe its days are numbered. More

LinkedIn shares surged in after-hours trading Thursday following strong second-quarter earnings, following the likes of Facebook and Twitter. More

Terrell White has had a profit-sharing plan for his employees since 1981, believing that if the staff isn't happy, guests won't be either. More

The Mason family, which has been struggling to pay the $100,000 student loan bill they were left with when their daughter passed away five years ago, is now seeing an outpouring of support. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.