"It has been more than a year since Google announced a bizarre stock split -- which would allow the company to issue more shares. The move got held up due to a legal battle, but the split is finally closer to reality after Google settled a case with shareholders this weekend.
The settlement dials back some of the biggest objections shareholders had with the split, but Google (GOOG, Fortune 500) got off relatively unscathed.
At first glance, the stock split sounds typical enough: Google will give current shareholders two shares for every share they own, and the price of Google's stock will be cut in half. But the deal comes with a crucial twist -- the new Class C shares will hold no voting powers.
That will essentially give the company's founders -- CEO Larry Page, Chairman Eric Schmidt and co-founder Sergey Brin -- even more say in the company's management decisions. The company already has a dual-class share system, with the founders' stock holding 10 votes per share. That currently gives Google's power trio 64% of the voting power over the company's shares, according to a recent regulatory filing.
The stock split was first announced in April 2012 and approved by shareholders in June 2012 -- not surprising, considering it had the backing of Page, Brin and Schmidt.
Corporate governance advocates were aghast, and a group of shareholders sued, arguing that the terms of the agreement were unfair.
On Sunday, Google's board approved a settlement with the shareholder group. As part of the deal, Google promised to consider using stock with voting rights as part of any future acquisitions rather than stock with no voting power. And if Brin and Page start to sell their stock, Google will consider abandoning the multi-class stock concept.
Google will file the proposed settlement agreement to a court for final approval, and then stockholders will be given a chance to review it".