What Really Changes Now That Larry Page Is No Longer CEO Of Alphabet?

 forbes.com  12/04/2019 11:00:05 
Google Developers Event Held In San Francisco

Google cofounders Larry Page and Sergey Brin will retain their majority voting power in Alphabet, ... [+] even after relinquishing their executive roles.

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On Tuesday, Google cofounder Larry Page stepped down as the CEO of Alphabet, handing the reins to current Google CEO Sundar Pichai, who will now lead both companies. 

On the surface, its the end of an era: Page has relinquished the position hes held for four years and given up an executive role for the first time since founding Google with Sergey Brin in 1998. However, in many ways the shift retains the status quo. Page had already ceded significant responsibility to Pichai when Google restructured into Alphabet in 2015 and has stepped back both publicly and within the company in recent years. Pichai will now oversee Alphabet subsidiaries like self-driving car firm Waymo and health-tech company Calico, though all of its so-called Other Bets still account for a tiny amount of the companys overall revenues and costs and also still have their own individual CEOs.

With Tuesdays announcement, both Page and Brin will remain on Alphabets board and, most importantly, still retain the majority of the companys voting shares. Because of the companys dual-class stock structure, Page and Brin control 25.9% and 25.1% of Alphabets total voting power, respectively, as of its latest filing. The company told Forbes that the companys voting structure is not changing with Tuesdays news.   

That means that while his official title may be gone, Pages role as a major corporate decision maker hardly changes. The founding duo will still be able to approve or veto any board-level decision. When Page didnt show up to the companys annual meeting in June, one shareholder called his absence disgraceful, due to his stake in the company. While the optics of Page skipping that event, or others like it, will not be as bad now that he isnt CEO, the crux of the shareholders frustration remains.

Ultimately, a perception shift may end up being the most significant change to come from Tuesdays announcement.

As regulators in Washington and around the world increasingly scrutinize Big Tech, chief executives like Facebooks Mark Zuckerberg, Twitters Jack Dorsey, Apples Tim Cook, and Amazons Jeff Bezos have all appeared in D.C. So has Pichai. Page has not. Now that hes no longer an executive, hes no longer the one that lawmakers  including angry Senators  will call on.

Page and Brin are also stepping back at a time when the super-rich are facing more criticism than ever. Both are billionaires many times over  with net-worths of nearly $60 billion by Forbes estimates  while Pichai is not. As Democratic presidential candidates Elizabeth Warren and Bernie Sanders both call for ways to limit personal wealth, Alphabet can better stay out of that political fray with Pichai leading the ship. 

Getting Page and Brin further out of the picture could also quell associations between Alphabet and their own personal ventures. For example, Larry Page is bankrolling a flying car company, Kitty Hawk, that is facing a range of issues, including battery fires at its office. Meanwhile, Brin is reportedly funding a giant blimp. In the cofounders announcement on Tuesday, they didnt drop any hints on what theyd be doing with their newfound time other than to remain actively involved as Board members, shareholders, and co-founders, and continue talking with Sundar regularly. In that vein, both cofounders donate to philanthropic trusts through their family foundations, though neither have championed a cause, unlike Bezos, Zuckerberg, or Microsoft founder Bill Gates.

The announcement also comes as Google faces more internal strife than ever before, as employees clash with management on the companys business decisions and policies. When workers were protesting Googles plans to launch a censored search engine in China last year or the companys relationship with the U.S. Customs and Border Protection, they raised Brins background as an immigrant whose family fled a dictatorship as an argument against the companys actions. With Brin and Page stepping back, it appears that the perception that the cofounders would help guide that kind of philosophical decision-making is gone, too. (On the other side of the coin: Their departure may help repair the notion that Alphabets attitude toward sexual misconduct is skewed by its top executives' conduct, since Brin himself had an extramarital affair with a Google employee.)

While cutting off their management titles allows Brin and Page to remain further out of the spotlight than ever before, their real power is still tied to their majority voting shares.

After Alphabet announced the news on Tuesday, the companys after-hours stock reflected the concrete significance of their departures: It barely moved.

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