Google Leaves Shareholders in Dark About 'Green' Investments
Google shareholders are the company’s true owners, and Google’s corporate leaders should be good stewards of investor money. Alternative energy investments are speculative, and it would be worrisome to shareholders if Google were to use shareholders’ money to support Doerr’s risky moves, or to blindly follow his wide-eyed supposition.
These transactions may have breached the company’s Code of Conduct policy. Google’s Code of Conduct specifically includes a conflict of interest policy to address financial conflicts that involve personal investments.
Google’s Code of Conduct is very clear. “Googlers,” as they refer to themselves, must ask whether a financial situation could be perceived to create an incentive for the employee, and if so, they must avoid the conflict.
Instead of accepting our proposed, effortless call for transparency, our proposal was met with recalcitrance. Formally, the board of directors recommended that shareholders vote against the proposal. However, many of the board members could not be bothered to attend the shareholder meeting.
And Google leadership that did attend acted unprofessionally.
Leading the way was Google’s new CEO, Larry Page, who displayed his own brand of apathy. Traditionally, corporate CEOs conduct shareholder meetings. Not at Google. Page was late and generally uninterested in engaging the shareholders. Google Senior Vice President David Drummond conducted the business of the meeting.
Customarily, corporate CEOs thank the presenters for their proposal and offer laudatory words and then state the company’s opposing (or accepting) position diplomatically -- but Google’s meeting was far from ordinary. Drummond did not fully address the issue in the proposal, tersely stated that the board rejected the proposal, and then moved on.
There was one group, however, that loudly supported the proposal -- Google shareholders.
My call for transparency received a rousing ovation from the shareholders in attendance. Google executives heard loud and clear that shareholders want to know more about what is motivating the company’s alternative energy investments.
At different segments of the meeting, Google officers mentioned that they thought alternative energy was important for Google and the country. At one point, Page suggested the company did not spend huge resources in the alternative energy markets. These half-responses do not explain the apparent conflict of interest between Google and Doerr and why Google’s policy preferences trump sound business.
During the question-and-answer session, Google shareholder Shelton Ehrlich praised the National Center’s proposal, and accused the company’s executives of having a “religious conflict of interest” for bowing at the altar of green energy solutions.
Even Glass Lewis, one of the major proxy voting firms, called on Google to be transparent, and to explain to “what extent Doerr participated in these [alternative energy] investment decisions.”
In the end, and in large part due to the board’s negative recommendation, the proposal did not receive the required votes for passage.
Google needs a better communication mechanism to ensure its investors understand the company’s spending. The board’s haughty performance and its dismissive attitude towards their shareholders’ interests add weight to the National Center’s suspicion that Google is not necessarily acting in the best interest of the company.
A liberal devotion to alternative energy policy solutions is not an acceptable business explanation for dedicating millions of shareholder dollars to an uncertain return. Green energy companies often do not actually compete in a marketplace. Without government subsidies and a strong renewable energy standard, many of these companies would go under.
Across America, alternative energy companies are closing shop. In Devens, Massachusetts, Evergreen Solar -- a solar panel company -- closed its headquarters and now does much of its work in China despite massive tax breaks and incentives from the Commonwealth. And just down the road from Google’s headquarters, another solar panel company, Solyndra Solar, received a $535 million securitized loan from President Obama’s stimulus bill to expand its operations and hire new workers. Solyndra hired no new employees and actually downsized: its operations are not profitable and the federal government may never recoup its money.
Google’s future in alternative energy may have the same drastic conclusion.
Nothing truly worthwhile hides in the dark. Google should explain its motivation behind its alternative energy investments, and what role Doerr played. Google’s leadership should share the truth with the company’s true owners -- the shareholders.