Alphabet’s shareholder meeting last week resulted in a predictable outcome: All stockholder proposals were voted down.
Stockholder proposals tend to fail at any company. Management votes against them and larger investors with more shares typically vote with management.
At Alphabet, the parent company of Google, voting power is even more concentrated because of a limited supply of supervoting shares belonging mostly to Google co-founders Larry Page and Sergey Brin.
Basically, it’s a founders’ company with the founders controlling the outcome of the vote.
One proposal this year in particular demonstrates just how much control Page and Brin have because of their special voting powers, and it’s a proposal that deals with that very issue.
Shareholders proposed that each shareholder get a vote equal to the number of shares they own without any super votes. Here’s how the tally came down:
- For: 191.7 million
- Against: 472.6 million
Page and Brin have about 393 million votes between them because of their supervoting powers. We’re assuming they voted against this proposal though we don’t have a breakdown from Google.
Without their supervote powers, their share of the “against” tally would be reduced to 39.3 million. Then it looks like this:
- For: 191.7 million
- Against: 118.9 million
Clearly, shareholders are interested in having more power over the direction of Alphabet and are not in agreement with top management.
It’s interesting to consider what this type of calculation would show about other shareholder proposals, especially this year where two proposals pertained to areas where Alphabet is facing public pressure. One proposal was for a report detailing policies and goals to reduce any gender pay gap at Alphabet; another was for Alphabet to study the societal impact of hate speech and fake news enabled by Google’s platforms.
Using the same calculations, and assuming Page and Brin voted against all shareholder proposals, here’s how those votes would have played out if voting rights were equal:
- Actual: 84.2 million (for) vs. 579.6 million (against)
- Equal voting power: 84.2 million (for) vs. 225.9 million (against)
- Actual vote breakdown: 9.4 million (for) vs. 650.7 million (against)
- Equal voting power: 9.4 million (for) vs. 296.9 million (against)
Both proposals still would have lost even if Page and Brin had fewer votes, but they would have lost by narrower margins.
Here’s a little more explanation on the math:
- Alphabet has three types of shares: Class A shares, which are valued at one vote each; Class B shares, valued at 10 votes each; and Class C shares, which do not come with voting privileges.
- Page has roughly 19.95 million Class B shares, and Brin has 19.3 million Class B shares, which comes out to 83.3 percent of Class B shares, according to the Alphabet’s most recent proxy statement.
- Page also has 25,000 Class A shares, which doesn’t really change anything in terms of his voting power. Together, Page and Brin have 51.1 percent of shareholder voting power.
- There are a good chunk of Class B shares that belong to other Alphabet board members and even some shareholders not on Alphabet’s board. We didn’t try to level those out in our calculations.
- We only looked at the for and against votes in these calculations. Some shares with voting rights are voluntarily not cast.
This article originally appeared on Recode.net.