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Stock Split Could Cost Google Over $500 Million

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In this Dec. 12, 2013 file photo, Google co-founder Sergey Brin arrives for the Breakthrough Prize in Life Sciences awards in Moffett Field, Calif. Google may have to pay more than half a billion dollars for an unorthodox stock split aimed at ensuring co-founders Brin and Larry Page retain control over the Internet’s most profitable company. (AP Photo/Ben Margot, File)

In this Dec. 12, 2013 file photo, Google co-founder Sergey Brin arrives for the Breakthrough Prize in Life Sciences awards in Moffett Field, Calif. Google may have to pay more than half a billion dollars for an unorthodox stock split aimed at ensuring co-founders Brin and Larry Page retain control over the Internet’s most profitable company. (AP Photo/Ben Margot, File)

MICHAEL LIEDTKE, AP Technology Writer

SAN FRANCISCO (AP) — An unorthodox stock split designed to ensure Google CEO Larry Page and fellow co-founder Sergey Brin retain control of the Internet’s most profitable company could cost Google more than half a billion dollars.

Page, 42, and Brin, 41, have maintained control over Google since they started the company in a rented Silicon Valley garage in 1998. Their ideas and leadership have spawned one of the world’s best known and most powerful companies with a market value of $368 billion and a payroll of about 54,000 employees.

Yet many investors have become frustrated with Page’s unwavering belief that Google should be spending billions on far-flung projects ranging from driverless cars to diabetes-controlling contact lenses that may take years to pay off and have little to do with the company’s main business of search and digital advertising. The big spending is one reason Google’s stock price is 3 percent below where it stood at the end of 2013, while the Standard & Poor’s 500 index has climbed 12 percent.

To maintain the power to drive Google’s direction, Page and Brin initially accumulated virtually all of the company’s class “B” shares, which have 10 votes for each “A” share. The duo, though, worried that control would erode as Google issued more “A” shares to pay for acquisitions and reward other workers. A year ago Thursday, Google split its stock to create a new category of “C” stock with no voting power that would allow more Google shares to be issued without undercutting Page and Brin.

Class “A” shareholders were outraged, skewering the maneuver as a textbook example of shoddy corporate governance. Google argued there wouldn’t be much difference between the price of “C” and “A” shares because Page and Brin held majority control anyway with the “B” shares. To settle a class-action lawsuit challenging the split, Google agreed to compensate “C” shareholders if the average price of “C” stock fell more than 1 percent below “A” shares through the first year of trading.

Google’s theory proved wrong, said BGC Financial Partners Colin Gillis. The difference turned out to be between 1 percent and 2 percent through the first year, though the final gap won’t be announced for up to 30 days as Google works with outside experts to determine the figures under a complex formula.

“This shows the market does place a value on owning a voting stock,” he said.

Google disclosed in a recent regulatory filing that it would have owed about $593 million to class C stockholders had the calculations been done on Dec. 31. Based on that estimate, the class C stockholders would receive roughly $1.74 per share in cash or additional stock. The exact amount that Google owes will be calculated based on the average trading prices over the full one-year period that ended Thursday after the stock market closed.

The Mountain View, California, company has until early July to pay the money. It’s something that Google can easily afford, given the company holds $64 billion in cash. And the damage could have been a lot worse: Google would have had to pay $7.5 billion, or about $22 per share, had the first-year spread between “A” and “C” shares was 5 percent or more.

Class C shareholders should ask themselves if the money they are getting is enough to compensate for relinquishing their voting rights and ceding control to Page and Brin, said Charles Elson, director of the University of Delaware’s Weinberg center for corporate governance.

Shareholders “are getting this cash for giving up their say in effective management,” Elson said. “This could be a case of ‘penny wise, pound foolish.'”

Google declined to comment.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Oakland Post: Week of June 18 – 24, 2025

The printed Weekly Edition of the Oakland Post: Week of June 18 – 24, 2025

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OPINION: California’s Legislature Has the Wrong Prescription for the Affordability Crisis — Gov. Newsom’s Plan Hits the Mark

Last month, Gov. Newsom included measures in his budget that would encourage greater transparency, accountability, and affordability across the prescription drug supply chain. His plan would deliver real relief to struggling Californians. It would also help expose the hidden markups and practices by big drug companies that push the prices of prescription drugs higher and higher. The legislature should follow the Governor’s lead and embrace sensible, fair regulations that will not raise the cost of medications.

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Rev. Dr. Lawrence E. VanHook. Courtesy of Rev. Dr. Lawrence E. VanHook.
Rev. Dr. Lawrence E. VanHook. Courtesy of Rev. Dr. Lawrence E. VanHook.

By Rev. Dr. Lawrence E. VanHook

As a pastor and East Bay resident, I see firsthand how my community struggles with the rising cost of everyday living. A fellow pastor in Oakland recently told me he cuts his pills in half to make them last longer because of the crushing costs of drugs.

Meanwhile, community members are contending with skyrocketing grocery prices and a lack of affordable healthcare options, while businesses are being forced to close their doors.

Our community is hurting. Things have to change.

The most pressing issue that demands our leaders’ attention is rising healthcare costs, and particularly the rising cost of medications. Annual prescription drug costs in California have spiked by nearly 50% since 2018, from $9.1 billion to $13.6 billion.

Last month, Gov. Newsom included measures in his budget that would encourage greater transparency, accountability, and affordability across the prescription drug supply chain. His plan would deliver real relief to struggling Californians. It would also help expose the hidden markups and practices by big drug companies that push the prices of prescription drugs higher and higher. The legislature should follow the Governor’s lead and embrace sensible, fair regulations that will not raise the cost of medications.

Some lawmakers, however, have advanced legislation that would drive up healthcare costs and set communities like mine back further.

I’m particularly concerned with Senate Bill (SB) 41, sponsored by Sen. Scott Wiener (D-San Francisco), a carbon copy of a 2024 bill that I strongly opposed and Gov. Newsom rightly vetoed. This bill would impose significant healthcare costs on patients, small businesses, and working families, while allowing big drug companies to increase their profits.

SB 41 would impose a new $10.05 pharmacy fee for every prescription filled in California. This new fee, which would apply to millions of Californians, is roughly five times higher than the current average of $2.

For example, a Bay Area family with five monthly prescriptions would be forced to shoulder about $500 more in annual health costs. If a small business covers 25 employees, each with four prescription fills per month (the national average), that would add nearly $10,000 per year in health care costs.

This bill would also restrict how health plan sponsors — like employers, unions, state plans, Medicare, and Medicaid — partner with pharmacy benefit managers (PBMs) to negotiate against big drug companies and deliver the lowest possible costs for employees and members. By mandating a flat fee for pharmacy benefit services, this misguided legislation would undercut your health plan’s ability to drive down costs while handing more profits to pharmaceutical manufacturers.

This bill would also endanger patients by eliminating safety requirements for pharmacies that dispense complex and costly specialty medications. Additionally, it would restrict home delivery for prescriptions, a convenient and affordable service that many families rely on.

Instead of repeating the same tired plan laid out in the big pharma-backed playbook, lawmakers should embrace Newsom’s transparency-first approach and prioritize our communities.

Let’s urge our state legislators to reject policies like SB 41 that would make a difficult situation even worse for communities like ours.

About the Author

Rev. Dr. VanHook is the founder and pastor of The Community Church in Oakland and the founder of The Charis House, a re-entry facility for men recovering from alcohol and drug abuse.

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Antonio‌ ‌Ray‌ ‌Harvey‌

Air Quality Board Rejects Two Rules Written to Ban Gas Water Heaters and Furnaces

The proposal would have affected 17 million residents in Southern California, requiring businesses, homeowners, and renters to convert to electric units. “We’ve gone through six months, and we’ve made a decision today,” said SCAQMD board member Carlos Rodriguez. “It’s time to move forward with what’s next on our policy agenda.”

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Shutterstock.

By Antonio‌ ‌Ray‌ ‌Harvey‌
California‌ ‌Black‌ ‌Media‌ 

Two proposed rules to eliminate the usage of gas water heaters and furnaces by the South Coast Air Quality Management District (SCAQMD) in Southern California were rejected by the Governing Board on June 6.

Energy policy analysts say the board’s decision has broader implications for the state.

With a 7-5 vote, the board decided not to amend Rules 1111 and 1121 at the meeting held in Diamond Bar in L.A. County.

The proposal would have affected 17 million residents in Southern California, requiring businesses, homeowners, and renters to convert to electric units.

“We’ve gone through six months, and we’ve made a decision today,” said SCAQMD board member Carlos Rodriguez. “It’s time to move forward with what’s next on our policy agenda.”

The AQMD governing board is a 13-member body responsible for setting air quality policies and regulations within the South Coast Air Basin, which covers areas in four counties: Riverside County, Orange County, San Bernardino County and parts of Los Angeles County.

The board is made up of representatives from various elected offices within the region, along with members who are appointed by the Governor, Speaker of the Assembly, and Senate Rules Committee.

Holly J. Mitchell, who serves as a County Supervisor for the Second District of Los Angeles County, is a SCAQMD board member. She supported the amendments, but respected the board’s final decision, stating it was a “compromise.”

“In my policymaking experience, if you can come up with amended language that everyone finds some fault with, you’ve probably threaded the needle as best as you can,” Mitchell said before the vote. “What I am not okay with is serving on AQMD is making no decision. Why be here? We have a responsibility to do all that we can to get us on a path to cleaner air.”

The rules proposed by AQMD, Rule 1111 and Rule 1121, aim to reduce nitrogen oxide (NOx) emissions from natural gas-fired furnaces and water heaters.

Rule 1111 and Rule 1121 were designed to control air pollution, particularly emissions of nitrogen oxides (NOx).

Two days before the Governing Board’s vote, gubernatorial candidate Antonio Villaraigosa asked SCAQMD to reject the two rules.

Villaraigosa expressed his concerns during a Zoom call with the Cost of Living Council, a Southern California organization that also opposes the rules. Villaraigosa said the regulations are difficult to understand.

“Let me be clear, I’ve been a big supporter of AQMD over the decades. I have been a believer and a fighter on the issue of climate change my entire life,” Villaraigosa said. “But there is no question that what is going on now just doesn’t make sense. We are engaging in regulations that are put on the backs of working families, small businesses, and the middle class, and we don’t have the grid for all this.”

Rules 1111 and 1121 would also establish manufacturer requirements for the sale of space and water heating units that meet low-NOx and zero-NOx emission standards that change over time, according to SCAQMD.

The requirements also include a mitigation fee for NOx-emitting units, with an option to pay a higher mitigation fee if manufacturers sell more low-NOx water heating and space units.

Proponents of the proposed rules say the fees are designed to incentivize actions that reduce emissions.

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