The great innovators of the industry, Google Co-founders, Larry Page and Sergey Brin have planned to steadily sell off up to 10 million shares of stock over the next five years, according to a SEC filing.
Today’s share Value costs $550, so in all they will get $5.5 billion+. As a result, their voting control will drop from 59 percent today to 48 percent.
From the official filing:
Larry and Sergey currently hold approximately 57.7 million shares of Class B common stock, which represents approximately 18% of Google’s outstanding capital stock and approximately 59% of the voting power of Google’s outstanding capital stock. Under the terms of these Rule 10b5-1 trading plans, and as a part of a five year diversification plan, Larry and Sergey each intend to sell approximately 5 million shares. If Larry and Sergey complete all the planned sales under these Rule 10b5-1 trading plans, they would continue to collectively own approximately 47.7 million shares, which would represent approximately 15% of Google’s outstanding capital stock and approximately 48% of the voting power of Google’s outstanding capital stock (assuming no other sales and conversions of Google capital stock occur).
No, this is not what you are thinking. This is not loss of interest in the competitiveness of the company. The idea is to empower the newer innovators who are ready to invest and take Google to new heights.
As an outcome of this move, they would continue to be the largest shareholders, but would not be able to control the outcome of any shareholder vote as they do today. The current filing gives them flexibility of changing numbers (decreasing) out of not losing control over votes.
This is kind of practice everyone follows in the industry. Bill Gates and Salesforce CEO also sold stock of the companies they founded under similar plans. By following the plan of selling at regular intervals, they get to cash out and diversify their holdings without scaring the investors.