Google's Multi-Class Stock Structure Made Unique Alphabet Move - CFO Journal. - WSJ

Google's Multi-Class Stock Structure Made Unique Alphabet Move - CFO Journal. - WSJ

Google's Multi-Class Stock Structure Made Unique Alphabet Move - CFO Journal. - WSJ

FILE - In this May 15, 2013 file photo, Google co-founder and CEO Larry Page speaks during the keynote presentation at Google I / O 2013 in San Francisco. Google may have paid more than half a billion dollars for an unorthodox stock split aimed at ensuring co-founders Page and Sergey Brin retain control over the Internet? S most profitable company. (AP Photo / Jeff Chiu, File) Associated Press

Google's molding into Alphabet Inc. may be uniquely possible because of the company's rare stock-holding structure, where its founders control the direction of the business without majority economic

From a governance perspective, investors could view "Alphabet less as a public company than a public-private company hybrid," John Wilson, head of corporate governance at Cornerstone Capital Group said in to blog post.

Because the company has an unequal voting structure the founders of Google are uniquely able to take risky bets on new technology, while simultaneously growing the company's mature search and advertising business, Mr. Wilson said . The move to reorganize under the Alphabet holding company makes this structure more transparent.

Google's founders Larry Page and Sergey Brin no longer have majority ownership of their company's stock, but maintain control through a three-class share structure. Google's Class A shares are held by regular investors, while Class B super-voting shares carry 10 times the many votes for the founders. Class C shares have no voting rights, typically held by employees granted stock and Class A stockholders.

Dual class shares have been unpopular with investors for years, and concerns that such companies would be less responsive to shareholder demands. But Google's 2004 IPO sparked the trend of dual-class technology companies, including Zynga, Facebook and Groupon

Dual class shares are more common in companies controlled by founders, like Warren Buffett's Berkshire Hathaway, and the new structure makes Alphabet look a lot more like that.

"Google's Alphabet sounds like a 21st century Berkshire Hathaway," LinkedIn CEO Jeff Weiner said on Twitter this week.

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