The independent shareholders of Alphabet, Google's parent company, overwhelmingly supported a shareholder resolution asking company management to recapitalise the share structure so that each share has one vote at its recent AGM (7th June).

The resolution was put forward by NorthStar Asset Management, corporate governance activist and author James McRitchie, and activist investor John Chevedden as co-lead filers, along with co-filer Boston Common Asset Management. Alphabet's shares are currently split into class A shares - owned by independent shareholders - and class B shares owned by insiders of the company including directors and executives.

According to the proponents of the resolution, assuming that all outstanding class B shares were similarly voted, then up to 99.8% of class A shareholders supported the proposal. Of class B insider shares, if only executive officers and directors of the company are counted, then an estimated 88.7% of class A shareholders still supported this proposal, according to NorthStar. When both voting classes (A and B) were counted together there was an overall “for” vote of 28.9% compared to 27.7% in 2016.

Julie Goodridge, chief executive of  NorthStar, a socially responsible investment firm, said: "We hope this will be a wakeup call for Alphabet management. The fact that up to 99% of ordinary class A shareholders supported this proposal is a strong message to management that Mr. Brin and Mr. Page may be the founders, but shareholders who have put the greatest investment at risk want an equal vote in company decisions."

The shareholder resolution was first filed in 2012 by Chevedden and has been re-filed annually due to high shareholder support, according to NorthStar.  Chevedden said: “This proposal is a great example of the value of the shareholder proposal process,” remarked Chevedden. “As a small but active shareholder, the proposal I filed 5 years ago as an individual shareholder has now grown to give class A outside shareholders a communal voice that they couldn’t otherwise have.”

The proposers noted that despite the high vote by class A shareholders, the company is not obligated to make a change in the share structure because of the voting rights of class B shareholders. While Alphabet class A shareholders only receive one vote per share owned, class B shareholders have about 10 times the voting rights, according to NorthStar.

Lauren Compere, director of shareowner engagement at Boston Common Asset Management said: "Companies like to report that they have robust shareholder engagement programs, especially with their top holders, but given that we’re only a few percentage points shy of saying that all class A shareholders agree on the need for an equal vote is really a testament to overall shareholder dissatisfaction.'

McRitchie stated: "It’s important to note that some of the proposals the company put forward wouldn’t have been approved if all shareholders had equal voting power. Our calculations show that 75% of class A shareholders voted against the executive compensation package, and 80% disapproved of the amendment to the stock plan. This is true last year too – we estimate that 87% of class A shareholders voted against the stock plan in 2016. But management hasn’t responded to this clear illustration of discontent."

Meanwhile, Google has been fined €2.42 billion for breaching EU antitrust rules by the European Commission. The Commission said Google has abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service. The company must now end the conduct within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet.

Commissioner Margrethe Vestager, in charge of competition policy, said: "Google has come up with many innovative products and services that have made a difference to our lives. That's a good thing. But Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.

What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation."