Yahoo Finance Google shareholders urged to protest executive pay
Google (GOOGL) shareholders may be getting restless, as the company’s stock has shown little growth since the beginning of the year.
At Google’s annual shareholder meeting today, proxy advisory firm, Institutional Shareholder Services (ISS), is urging investors to protest executive compensation. ISS said that Google's compensation committee failed to tie stock grants to executive performance.
Last year the board issued Eric Schmidt, Google Executive Chairman, $100 million in restricted stock grants, while Omid Kordestani, Google's chief business officer, received $123 million in stock grants.
Some shareholders are also pushing for Google to fully disclose all of its lobbying efforts. Walden Asset Management filed a shareholder resolution asking for transparency regarding Google’s lobbying payments. Since 2008, Google has spent over $70 million on lobbying in Washington, according to OpenSecrets.org.
“I think if you're a shareholder, it's not really a bad thing if your company is lobbying," says Yahoo Finance’s Aaron Task. "I think it surprised a lot of people when it turned out that Google has now jumped to the top of the ranks of companies doing the most lobbying in Washington. There's other tech companies up there as well, but it used to be all about the Wall Street folks."
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On its website, Google lists dozens of trade associations and third party groups to which it provides support; however, some investors see a disconnect between Google's values and its affiliations. Google has come under scrutiny for its ties to the U.S. Chamber of Commerce, which has campaigned to stop the Environmental Protection Agency from combating climate change.
Task notes that shareholders enacting change at Google is unlikely given that the company’s executives control so much of the vote.
"We have to keep in mind that a little over a year ago, Google split its stock into different classes of shares," says Task. "The founders and Eric Schmidt…they own 16% of Google's stock, but they control 61% of the vote. So you can have all the proxy advisors you want to make any recommendations they want, but at the end of the day, the average Google shareholder just doesn't have the votes."
