The most prominent institutional shareholders are mutual funds BlackRock and The Vanguard Group, with 2.7% and 3.1%, respectively. Larry Page and Sergey Brin together have 51% of the voting power. Other individual shareholders comprise John Doerr (1.5%), venture capitalist and early investor in Google, and CEO, Sundar Pichai. Former Google CEO Eric Schmidt has 4.2% voting power.
- Google’s Class A, Class B, and Class C stocks: Not all shares are born equal
- Board of directors
- What’s the compensation for Google’s executives?
- What’s the difference between Stock awards and Option awards
- Google’s ownership structure before its 2004 IPO
- Who owns Google now?
- Who are Google’s top individual investors and owners?
- Key takeaway
- Related to Google
- Related Ownership Case Studies
When a company decides to issue equity in the form of common stocks, it can do so in several types depending on the limitations that the owners of the company want to give to voting powers.
Google’s Class B Common Stocks
In Google’s case, each Class B common stock holder is entitled to ten votes per share. Class B common stockholders have ten votes for each director nominee and ten for each proposal to be voted on.
We can define Class B stocks as common shares on steroids.
They empower those who own them to keep control of the company.
Page and Brin, Google’s founders, wanted to keep as much power in the company’s future decisions as they leveraged on Class B Common Stocks to have a higher weight on the company’s decisions.
Google’s Class A Common Stocks
Google’s Class A common stocks are entitled to vote.
Each share of Class A common stock is entitled to one vote for each director nominee and one vote for each of the proposals to be voted on.
Google’s Class C Common Stocks
Holders of Class C capital stock have no voting power as to any items of business that will be voted on at the Annual Meeting.
Those do confer ownership in the company and the right to be paid based on dividends and the company’s stock appreciation.
This list is worth looking at, like those are the people in charge of several “corporate functions.”
Board of directors
In 2022, the Board of Directors was composed of ten directors with the following committees:
2. a Leadership Development and Compensation Committee, which aims to oversee the compensation programs.
3. a Nominating and Corporate Governance Committee, the main purpose is to assist the Board of Directors in identifying individuals qualified to become members of the Board of Directors
4. an Executive Committee serves as an administrative committee of the Board of Directors to act upon and facilitate the consideration by senior management and the Board of Directors of certain high-level business and strategic matters.
From time to time, the Board of Directors may also establish ad hoc committees to address particular matters.
And they get reviewed each year based on various elements.
What is the compensation for those directors?
While it might change, we can look at compensation for 2022:
What’s the compensation for Google’s executives?
As a multi-billion tech giant, Google’s compensations are very competitive and based on the following elements:
- the base salary that provides a steady income to employees.
- equity awards, primarily based on the performance of each. an employee that will receive those awards.
In assessing the compensation part, Google took into account (at least for 2022) the following “peers companies:”
We can break down all the compensations in base salary, bonuses, stock awards, option awards, non-equity incentives plans, and non-qualified deferred compensation earnings.
In terms of salary, both Page and Brin get a symbolic $1.
Current CEO Sundar Pichai earned $2 million of base salary in 2021.
To notice Pichai received over $270 million in stock awards in 2019.
In 2021 the total compensation was $6.3 million.
What’s the difference between Stock awards and Option awards
When it comes to stock awards, they usually can get “vested” (exercised or monetized) at a certain date.
For instance, we can see how in 2021 Sundar Pichai “vested” millions of dollars of stock awards:
Sundar Pichai vested over $79 million worth of Google’s stocks.
When it comes to option awards – as a reference below – the executive or employee that receives it will have a fixed price to buy the stock at a specified date:
For instance, you notice the so-called exercise price in this table that shows the unvested (not yet exercised) stock options held by Schmidt and Pichai by December 2017.
For instance, in 2021, Eric Schmidt can purchase 181,840 Google stocks at $306.61.
Google’s ownership structure before its 2004 IPO
As defined in the proxy statement before Google’s IPO, percentage ownership is based on 162,550,115 shares of Class A common stock and 114,732,822 shares of Class B common stock outstanding on March 28, 2005.
At the time, just like today, Brin and Page seemed obsessed with control and ownership.
In fact, at the time, both of them held over 55.6% of the voting power.
Back then, the other individual investors with a consistent stake in the company were – at the time – CEO Erick Schmidt, venture capitalist John Doerr, venture capitalist Michael Moritz and Omid Kordestani, who at the time was in charge of Business Development and Sales and one of those who helped Google scale up (he closed the AOL deal).
Who owns Google now?
As of January 31, 2020, there were 300,047,170 shares of the registrant’s Class A common stock outstanding, and 46,407,491 shares of the registrant’s Class B common stock outstanding.
The company’s control is still in the hands of the two co-founders, Page and Brin.
If we look at the individuals owning the company, we have Larr Page and Sergey Brin, which together have 51% of the voting power.
The most prominent institutional shareholders (those with more than 5% of Google’s – now called Alphabet – share) are BlackRock, Fidelity (entities affiliated with it), and the Vanguard Group.
Who are Google’s top individual investors and owners?
Founder of Google together with Sergey Brin, Page was the inventor of the PageRank algorithm that made Google the success we know today. Director Since 1998 Larry Page, Chief Executive Officer of Alphabet. He has been a member of the Board of Directors since its inception in September 1998.
One of the venture capitalist being – almost – since the beginning, John Doerr was director Since 1999 and has served as a member of Google Board of Directors since May 1999. John Doerr has been a General Partner of Kleiner Perkins Caufield & Byers, a venture capital firm, since August 1980.
And as Google’s Senior Vice President of Android, Chrome, and Apps from March 2013 to October 2014. Since joining Google in April 2004, Sundar Pichai has held various positions, including Google’s Senior Vice President, Chrome and Apps; Senior Vice President, Chrome; and Vice President, Product Management.
Before joining Google, Sundar worked in engineering and product management at Applied Materials, Inc., a semiconductor company, and in management consulting at McKinsey & Company, a management consulting firm.
Over the years, while the ownership of Google has slightly changed, one thing has remained constant, control and ownership by its founders. Brin and Page still represent the major individual shareholders.
Also, as Google issued several common stocks, Brin and Page are the ones who – with their Class B common stocks – preserved their control over the company.
Even when, back in the 2000s, a “grown-up” CEO, Erick Schmidt, was brought in, Brin and Page still had more than 50% of the voting power. The company has adopted several collective decision-making systems over the years.
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