Google plans to split its stock 2-for-1 in part to preserve its leadership's voting power. However, they are issuing a new class of stock to shareholders that won't have any voting power. All current stockholders will get 1 share of the new Class C stock. Google said the split is something investors have been asking for but why the new class of stock and not just a straight cash dividend? When will (Nasdaq: GOOG) issue new stock? Are people talking about the Google Class C shares having zero voting power aware Larry and Sergey currently have 60% voting power?
Investors will vote on the proposal in June. It's expected to pass because Google's senior leaders have most of the voting power. Larry Page said, "It's important to bear in mind that this proposal will only have an effect on governance over the very long term," CEO Larry Page and fellow co-founder Sergey Brin wrote in a letter. "It's just that since we know what we want to do, there's no reason to delay the decision."
Employees given Google stock in the future will get the non-voting share, allowing voting power to remain with existing shareholders. Also, management will have the voting stock tied to the non-voting shares through a "staple agreement".