Google co-founders Larry Page and Sergey Brin are planning to sell up to 10 million shares over the next five years, according to a filing with the United States Security Exchange Commission.
While the sale is designed to occur over several years, at the share’s current price the move would provide about $US2.75 billion each for the two founders. Google share price currently stands at $US550.01.
However, the sale will see Page and Brin dramatically reduce their voting power in the company, with their vote dropping from 59% to 48% after the sale is completed.
The company has revealed little detail about the sale, except saying it is part of a plan to ”allow Larry and Sergey to sell a portion of their Google stock over time as part of their respective long-term strategies for individual asset diversification and liquidity”.
“Using these plans, they can gradually diversify their investment portfolios and can spread stock trades out over an extended period of time to reduce market impact.”
The pair hold about 57.7 million Class B shares, which accounts for about 18% of outstanding capital stock. After the sale is completed, the pair will control about 15% of outstanding capital stock.
They would continue to be the company’s largest shareholders, but would have reduced control in the company. Google also said the move was not a sign the pair were abandoning the group for other ventures.
“Both as committed as ever to Google and are integrally involved in our day-to-day management and product strategy. The majority of their net worth remains with Google.”
Page currently acts as the president overseeing products, with Brin acting as president for technology. In 2004 both also revealed a separate plan to sell 7.2 million shares each.
The sale isn’t necessarily unusual. Bill Gates, former chief executive of Microsoft, along with several other prominent executives, have been known to sell shares of the companies which they founded under similar structures.
Google was founded in the mid 1990s by Page and Brin during their stint as students at Stanford University. In 1998 the company began operating from a garage in California, and received over $1 million in initial funding, including $100,000 by Sun Microsystems co-founder Andy Bechtolsheim.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
