A lawsuit filed against Google Inc. (NASDAQ:GOOG) on Monday alleges that the company’s proposed stock split would allow Google’s co-creators to reap huge equity benefits while breaking their fiduciary responsibility to shareholders.
The stock split plan, which was announced earlier this month, would result in shareholders receiving one share of non-voting “Class C” stock for every “Class A” share they hold. The split would allow the company to issue new stock without diluting the 56.3 percent stake held by the co-owners.
According to Brockton Retirement Board, the filers of the lawsuit, the split allows the co-owners to retain their “iron-clad grip” on control of the company. The lawsuit also condemns the “special committee” that approved the split for not seeking a fairness opinion or obtaining an agreement from the founders to continue working for the firm.