Larry & Sergey To Cash In $5.5B of Google Chips 339
theodp writes "According to an SEC filing, Google founders Larry Page and Sergey Brin have adopted five-year trading plans to sell about 5M shares each, which would yield each about $2.75B based on Friday's closing stock price of $550.01. BTW, Google kicks in 12 cents to Social Security and another 2 cents to Medicare on its founders' celebrated $1 annual salaries." After this stock is sold, the founders will hold less than 50% of the voting shares and thus will give up voting control of Google.
Will this mean there's no "vision" at Google? (Score:3, Interesting)
Google has always appeared to me as a company that was moved by the vision of its founders. While the "do no evil" policy has been... flexible, there has always been a sort of philanthropic, "we get why you hate Microsoft, we want to be different" type of thing with Google.
I wonder how long that will last with the founder no longer in control.
Re:They will still control Google (Score:5, Interesting)
Yeah. Anything more than 30% (or less) is sufficient to control a large public corporation. The majority of stock in a corporation like Google is held by mutual funds, who do not typically actively engage in corporate control. So 30% is more than 60% of the stock held by individuals, who are more likely to claim a voice in corporate governance. IOW, they're keeping total control, for all practical purposes.
Re:The SS/Medicare comment is pointless (Score:5, Interesting)
Re:BFD (Score:5, Interesting)
I bet the Chinese Government are buying those shares (and the voting rights attached to them) as fast as they can. People said Larry and Sergei were crazy pissing them off but maybe it's all part of the plan.
Re:They will still control Google (Score:1, Interesting)
Over? This thing is just beginning. Their public moves in China did not allow the regime to save face. The criticism out of Google was way too direct following the hacking incident, and it did not leave a face saving path to resolution for the Chinese Government.
By diminishing their visibility at the helm of Google they are both hardening the target and reducing the impact that their personal and now mandatory falls from grace will have on the company. Either way, someone is going to have to feel the pain for the way the China situation was handled. Better it be the millionaires and not the foot soldiers.
Re:The SS/Medicare comment is pointless (Score:4, Interesting)
...as Warren Buffet has pointed out, our tax system is skewed so that wealthy folks like himself pay an effective tax rate of 17.7% [nytimes.com], while his secretary is taxed at 30%.
Can someone please tell me why we just don't move to a simple flat tax rate? You make minimum wage? You pay X%. You're lower middle class? You pay the same X%. You're upper class? You pay the sam X%. You're the CEO of a fortune 500 company? You pay the same X%.
This way politicians would have to upset everyone in order to raise taxes and couldn't single out certain groups based on which one is most likely to put up with it (or is unable to vote them out). If they want/need to increase taxes, it must affect ALL of their constituents.
Also, as long as what is taxed is clearly defined, it makes tax codes a LOT simpler. Easier job for the IRS, accountants, employers, and employees.
Re:They will still control Google (Score:5, Interesting)
Since they are cashing out together, it seems they have some joint project they want to work on. Maybe something to do with censorship in China? A several billion dollar advertising campaign could do something maybe.
Re:The SS/Medicare comment is pointless (Score:5, Interesting)
Well, it depends on what you mean by "a flat tax". People pushing the flat tax, like Steve Forbes, have typically been pushing for a flat tax on wage and salary income, but that excludes capital gains entirely. One flat tax of x% for the working schmucks, and another flat tax of 0% for the trust-fund kids like Steve Forbes.
If it were a flat tax that included capital gains, that might have a better chance of going somewhere, but the major flat-tax proponents have not been pushing that. Though even in that case you would have a bunch of entrenched popular deductions that people would try to pull in, like the mortgage-interest deduction, the deduction on money donated to charity, etc.
The real question is - (Score:2, Interesting)
What are they planning to do with the money? Simply kick back and relax? Or now that Google's reached cruising speed, are they likely to be looking around for new challenges?
Re:The SS/Medicare comment is pointless (Score:3, Interesting)
Can someone please tell me why we just don't move to a simple flat tax rate? You make minimum wage? You pay X%. You're lower middle class? You pay the same X%. You're upper class? You pay the sam X%. You're the CEO of a fortune 500 company? You pay the same X%.
If you need 20k to make ends meet and you get 30k, you won't be happy if the flat rate is 33%.
If you need 40k to make ends meet and you get 100k, you won't be happy if the flat rate is 33%. But at least you'll be able to put away 25k for retirement.
If you need 80k to make ends meet and you get 300k, you won't care if the flat rate is 33%. After all, you still get 120k to invest. After 5 years, you can more than hire a 30k maid just on interests, who still won't be able to make ends meet. {30k spent = 45k income, on 600k = 7.5%}
Pure flat tax would work if income vs need was linear, but it's closer to exponential. Moreover, your driver will be company expenses since you can work on the way, while the bus pass will come from the maid's pocket change. Not that it's unfair, but just to show the solution ain't that easy.
Re:The SS/Medicare comment is pointless (Score:1, Interesting)
By "flat tax" I thought he meant the same X% on every transactions. Income, mortgage payments, groceries, every transaction pays the same rate. It turns out that 1% of every recorded payment, split between the buyer paying 1/2 % and the seller paying 1/2 %, should pay for all public services. We can even ignore cash transactions, and still pay for government services and, uh, .... excuse me, there's someone at the doot.
--- TO BE CONTINUED ---
Re:Why do I care about Google contributing to SS? (Score:5, Interesting)
Did you actually read what he said? It's not "Social Security and Medicare", it's just Medicare. And only Medicare.
And this is because our health care system has such screwed up incentives the costs are spiralling out of control system wide which is driving up the Medicare costs to levels that cannot be supported.
Since our government simply refuses to do anything to get the situation under control it'll what bankrupt us, not Social Security which has been 40 years away from bankruptcy for like the last 50 years (and even if and when the trust fund empties it'll be able to provide along the lines of 90% of the promised benefits).
They're being lumped together for partisan, idological reasons that have nothing to do with the fiscal stability of Social Security.
I smell a Rat (Score:3, Interesting)
Trouble in China followed by the two principals cashing in stock? Something's going down.
The wave has crested (Score:4, Interesting)
It's all downhill from here. I wouldn't say that Google's endeavors beyond search have been complete failures. I wouldn't call them raging successes either. The time is coming in the next few years when people are going to take a long and hard look at Google's valuation and begin to ask, "Where is the value?"
For all of their side projects and initiatives and ideas, Google seems to be little more than the most successful (so far) advertising resource on the internet. It isn't hard to imagine Google holding onto their lead in search, and that will continue to generate revenue for them. Beyond that, what are they really going to do that justifies their $500+ per share stock price? Cellphones, netbooks, tablets? Google Apps?
Re:It is about time (Score:3, Interesting)
Re:They will still control Google (Score:3, Interesting)
Except they still have most of their wealth in Google stock. More likely they just want some money. Bill Gates did the same thing when he started his charitable organization, so maybe they are planning on starting a charity. Or maybe they want to buy some islands somewhere. Or a small country.
Just some a-grade weed and one hell of a high price hooker!
Re:It is about time (Score:3, Interesting)
"Maybe now the company will stop wasting money on projects with a shit ROI and return some of the profits to shareholders in the form of dividends."
I totally agree. Microsoft has been gouging investors for years.
Re:Why do I care about Google contributing to SS? (Score:5, Interesting)
I don't care so much about SS. It's capped anyway, and to within a hand grenades throw you pretty much take out only what you put in.
However, what I don't agree with is them taking $1 and for the most part dodging an income tax. They aren't doing it to save jobs, like the CEO of Vale or Aspen or one of those who did the same thing. For these guys its all PR. The company can afford to pay them. And should. Instead it pays less taxes on that money than if it were on a personal income. All of the things that you and me pay for they are getting for free, or at a lower rate because they have the ability to be compensated in ways that have lower tax rates. It's good to know these guys have policemen and firemen protecting their millions in assets for free. It's good to know that the fighter jets that will protect them from the Chinese were not funded at all by these bozos (yes, a bit of tongue in cheek there but you get the point). These guys are dodging their civic duties for good PR and nothing more.
What they should do is take hte salary and contrinute 100% of it to the national debt, or other charity.
Re:They will still control Google (Score:2, Interesting)
You mean Mr. "If You Have Something You Don't Want Anyone To Know, Maybe You Shouldn't Be Doing It"? Sure, I'll sleep soundly tonight.
What the hell. At least he came out and said it. Government agencies can pull your data from nearly any service provider you might care to use very easily. The price lists leaked recently [slashdot.org] just confirm what is actually available and that while at least there is process in place in general it doesn't cost them much to get their hands on your entire account history and/or ongoing interception. While higher-ups in other companies were concerned about public perception of their companies if the word ever got out, here we are chastising someone who was more open about the situation. Talk about shooting the messenger.
Sure, go take your data to someone else who pretends to offer you more privacy. Chances are, depending on where they happen to have offices, they don't.
Re:They will still control Google (Score:3, Interesting)
And one more thing...there was nothing altruistic about what they did in China. Their opportunity to do any such thing passed long ago, when they had the choice of whether or not to hand over information on Chinese dissidents a couple of years back, gave the guys up, then tried to hide behind the veil of "we're only doing what's lawful".
Re:BFD (Score:3, Interesting)
The class B shares that L&S own, which have 10x the voting power of class A (regular) shares, convert to class A shares when they sell. Nobody else can use a sale like this to grab a disproportionate share of control over the company.