Why Google's Annual Shareholder Meeting Just Does Not Matter (GOOG, FB, YHOO, MSFT)

Investing

Published: June 21, 2012 12:19 pm

Last Updated: April 28, 2020 10:18 am

Google Inc. (NASDAQ: GOOG) is hosting its annual shareholder meeting today at 2:00 PM local time (5:00 PM EST). Investors should really consider something here: today’s annual shareholder meeting just doesn’t matter.

The problem is that Google is one of the eleven other companies where shareholders truly have no power. Sergey Brin and Larry Page have enough of the voting power to reign over any shareholder proposals and to pass any personal proposals they would have for Google. This is due to the A-shares and B-shares which allow the insiders to have a super-majority vote over those little common stock holders. Sergey and Larry hold close to 65% of the combined voting power.

The proxy filing noted, “Your vote is important. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible.” They just did not include “Your vote matters, even if it has no real power.”

The woes of Facebook, Inc. (NASDAQ: FB) may have actually helped Google. The question on this ahead is whether or not the Google ad-exchange can help Facebook hone in better on display advertising rates. Google has seen more competition from Microsoft Corporation (NASDAQ: MSFT) and Yahoo! INc. (NASDAQ: YHOO) due to the growth of Bing over the last year or more. Unfortunately, that is not likely to matter for today’s shareholder meeting.

Here are the points up for vote:

To elect nine members of the board of directors to hold office until the next annual meeting of stockholders or until their respective successors have been elected and qualified.
To ratify the appointment of Ernst & Young LLP as Google’s independent registered public accounting firm for the fiscal year ending December 31, 2011.
To approve an amendment to Google’s 2004 Stock Plan to increase the number of authorized shares of Class A common stock issuable under the plan by 1,500,000.
To approve the 2010 compensation awarded to named executive officers.
To determine the frequency of future stockholder advisory votes regarding compensation awarded to named executive officers.
To consider and act upon a stockholder proposal regarding the formation of a board committee on sustainability, if properly presented at the meeting.
To consider and act upon a stockholder proposal regarding the adoption of a simple majority voting standard for stockholder matters, if properly presented at the meeting.
To consider and act upon a stockholder proposal regarding a conflict of interest and code of conduct compliance report, if properly presented at the meeting.
To consider such other business as may properly come before the meeting.

The matters for vote two which were bolded above are the most important issues to consider. Unfortunately, the shareholders just do not have enough votes to influence the outcome unless Sergey and Larry decide that they suddenly want shareholders to have a real vote.

JON C. OGG

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