Shareholders who are worried that they will never see the back of Larry Page and Sergey Brin are suing Google to prevent the company’s stock split plan.
Google announced the surprise stock split plan earlier this month and it means that shareholders would get one new share of non-voting “Class C” stock for each existing “Class A” share.
While shareholders think that is ok, what they are concerned about is that Google will be able to issue new shares for acquisitions and employee compensation without diluting Page and Brin’s 56.3 percent voting stake.
According to Reuters, the shareholders are worried about Page and Brin’s “iron-clad grip” on Google.
The class action lawsuit is being lead by the Brockton Retirement Board and it has accused the co-founders and Google’s board of breaching their fiduciary duty to the company’s shareholders.
They say that Page and Brin want to retain their power, while selling off large amounts of their shares and reaping billions of dollars in proceeds.
Brockton Retirement Board said the stock split will grant billions of dollars to the co-founders for nothing.
It claims that a “special committee” of Google directors that approved the stock split did not seek a fairness opinion of its financial advisor. They never even bothered to get an agreement that the founders would continue working for the company. Page and Brin could just take the money and run.