Google has settled a lawsuit with the Brockton Retirement Board and another shareholder over the company’s plan to issue a new class of non-voting shares.
The suit, which was scheduled to go to trial on Tuesday, alleged that the share issue would benefit Google co-founders Larry Page and Sergey Brin while shortchanging the company’s other stockholders.
In April 2012, Google proposed a stock split by issuing a new class of “C” shares with no voting power to holders of “A” class stock.
The proposal would allow the co-founders to maintain their control of the company. While Page and Brin own about 15% of Google’s stock, they have 56% of voting power through a special “B” class of shares that gives them 10 votes per share.
Under the terms of the settlement, Google must provide compensation to owners of the new class of shares if they’re worth less than the existing class of shares after one year of trading.
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