As of January 30, 2015, Brin and Page held approximately 44.6 million shares of Google Class B stock and another 44.6 million shares of Class C stock. Under the new trading plan just filed, they will sell approximately 2 million shares of each Class B common stock they own (which will automatically convert to Class A shares upon sales), as well as another 2 million shares of each of their Class C non-voting stocks. After the transactions are complete, they will collectively own about 40.6 million shares of Class B stock and another 40.6 million shares of Class C stock, the filing says.
With both classes of Google stocks trading at approximately $US550 a share, the total 8 million shares they plan to sell translates to roughly $US4.4 billion. The filing didn’t specify when exactly the selling will take place, but as they did in the past, it will be extended over a period of time to minimize market impact, the filing said.
It’s worth noting that even after Page and Brin sell $US4.4 billion worth of shares, they will retain majority control of Google. Following the sales, Brin and Page will own only 11.9% of Google’s outstanding Class A and Class B common stock, yet still hold 52% of the voting power.
This is possible because of its dual-class share structure. Class B shares, mostly owned by Brin, Page, and Google Chairman Eric Schmidt, hold 10X the voting power of the common Class A stock. The Class C stocks have no voting power at all. It’s why Class B shares are often called “Super-voting” shares.
Dual-class structure is now pretty common among tech companies, as Facebook, Linkedin, and Box all have adopted this model. But Google was one of the first companies to bring this to the mainstream when they went public in 2004. It was very rare to see investors allow this form of stocks because it would give too much control to ownership, when the company is supposed to be publicly owned. Prior to Google, it was mostly family-run media companies, like The Wall Street Journal and The New York Times, that had this model, all under the name of protecting editorial independence.
Google duly acknowledged this in its S1 back in 2004, as it wrote, “We are creating a corporate structure that is designed for stability over long time horizons…By investing in Google, you are placing an unusual long term bet on the team, especially Sergey and me, and on our innovative approach.”
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