The company shareholder on Monday sued Google and its board over the company’s stock split plan. Google earlier this month during its quarter results announced the surprise stock split plan, in which shareholders would get one new share of non-voting “Class C” stock for each existing “Class A” share.
The complaint stated that As a result of the new plan, Google will be able to issue new shares for acquisitions and employee compensation without diluting the 56.3 percent voting stake enjoyed by Page and Brin or diminishing their “iron-clad grip” on Google.
The case was filed in the Court of Chancery in Delaware, where Mountain View, California-based Google is incorporated which said Page and Brin “wish to retain this power, while selling off large amounts of their stockholdings, and reaping billions of dollars in proceeds.”
The lawsuit also said the “special committee” of Google directors that approved the stock split did not seek a fairness opinion of its financial advisor and never extracted an agreement that the founders would continue working for the company.