Google Execs Solidify Control with Stock Split

Google's unusual upcoming stock split is about to upend the popular Standard & Poor's 500 and short-circuit the influence of common shareholders.

The complex financial maneuver will create the effect of a two-for-one stock split and dramatically reduce the voice of Google's common shareholders, but also change how the company is reflected in the value of the popular S&P 500 index. The share price will be cut in half from its lofty per-share level of $1,207.30 Wednesday, but investors will see their ability to have a say in the company greatly reduced.

The changes kick off on April 2, when Google will pay a dividend using newly created class C stock, to existing holders of the company's class A and class B shares. The new class C shares will carry no voting rights, making them unusual relative to the common shares issued by most companies.

S&P Dow Jones Indices has reversed course on the way it will deal with the situation in the S&P 500. Originally, the index provider was going to replace Google's class A shares in the index with class C. But late Tuesday, S&P Dow Jones Indices said it would include both the class A and the class C shares, meaning the S&P 500 will now have 501 stocks in it, representing 500 companies.

The index's rules are also being changed, in that going forward, companies that issue a new class of stock will be included in the S&P 500 if certain criteria are met. Those criteria include tests of liquidity and materiality levels. S&P Dow Jones Indices is reviewing the companies in the S&P 500 that already have several classes of stock that trade and will decide which ones will be added to the index by September 2015.

Currently, there are nearly 50 companies in the S&P 500 that have multiple...

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