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Google, the triumvirate
Now that Google is a public company, shareholders might be wondering just what they've gotten themselves into. The answer is on page 29 of the latest prospectus released on Aug. 18, 2004. Co-founders Larry Page and Sergey Brin and CEO Eric Schmidt "run Google as a triumvirate," the prospectus declares.
The term triumvirate (Latin for "rule by three men") or troika in Russian, is commonly used to describe an alliance between three equally powerful political or military leaders. These alliances seldom hold very long. The term can also be used to describe a state with three different military leaders who all declare to be the sole leader of the state.
As audacious as "triumvirate" sounds, the corporate-governance issues with Google only start there. The head Googlers have seen to it that the company obtains all the benefits of public ownership -- with hardly any of the responsibility.
Then there's the issue of whether Google is a "controlled" company under Nasdaq rules -- an outfit where more than 50% of the voting power is held by a single individual, group, or other company. If so, Google can claim an exemption from some of the most important governance provisions of the post-Enron era, including the requirement that the board have a majority of independent directors.
An insider-dominated board could easily pack the compensation committee with current and former execs and erect formidable takeover defenses such as staggered board elections.
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