The hidden side of politics

Alphabet Shareholders Demand Accountability

Reported by WIRED:

Alphabet, Google’s parent company, faced an onslaught of 14 independent shareholder proposals during its annual meeting on Wednesday, most criticizing the concentration of power in the hands of a few executives and all demanding some kind of structural change to make the company more accountable—to workers, shareholders, Chinese dissidents, or prospective neighbors of Google’s planned campus in San Jose.

The accountability theme was striking, across issues ranging from seeking a human rights assessment of Google’s work in China to clawing back compensation from executives who have sexually harassed employees.

Underscoring shareholders’ concerns, the company’s cofounders, Larry Page and Sergey Brin, were both no-shows and Google CEO Sundar Pichai didn’t answer any questions. All the proposals failed after a few minutes of ceremonial voting, an expected outcome given that Alphabet’s board recommended votes against each and that Page and Brin control 51 percent of the company’s voting power, despite owning 13 percent of its stock.

“We believe [Google’s] size and complexity [is] unmanageable,” said a representative from Sum of Us, an advocacy group of consumers, workers, and investors that cited human rights concerns in China as one reason Alphabet should hire independent advisers to evaluate restructuring the company. Alphabet operates “essentially as a dictatorship,” said a shareholder representative criticizing the extra voting power of shares held by Page and Brin.

This year’s meeting reflected an appreciable escalation in employee activism from 2018. Last year, Google engineer Irene Knapp introduced a proposal to tie executive compensation to progress on diversity. This year, three proposals were introduced by Alphabet employees, regarding human rights in China around Google’s proposed censored search app, mandatory arbitration and the use of nondisclosure agreements in sexual harassment claims, and tying executive pay to environmental sustainability and racial and gender diversity; the latter was introduced by Knapp.

Other Google employees addressed executives during the Q&A session. Marie Collins, a Google business analyst, said executives “feign powerlessness” when the company is challenged and “do not understand” the consequences of their actions, such as an “artificial caste system,” that denies contractors some of the privileges of employees.

Toward the end of the meeting, you could hear dozens of demonstrators—a group that included Google employees, low-paid contract workers, and local community members represented by the nonprofit Silicon Valley Rising—chanting outside. “We shouldn’t have to be here protesting. We should have been included” from the start, Knapp told the crowd gathered at the rally.

Executives seemed to anticipate some of the criticisms. Tuesday, Google announced a $1 billion effort to make Bay Area housing more affordable; at the meeting, chief financial officer Ruth Porat touted what she said was Google’s $335 billion economic impact in the US in 2018.

Alphabet also faced political backlash from the right, mirroring the national conversation around dominant tech platforms. Two speakers called out what they described as Google’s liberal bias and need for more conservative views, both mentioning the company’s decision to disband its ethics council.

The proposals were defeated, but shareholders added heft to concerns raised by employees by pointing out the risks to the company’s reputation around employee protests and the treatment of contractors. Max Kapczynski, an employee at Alphabet’s Verily life-sciences unit who introduced a proposal around equitable employment, told WIRED that choosing to hire contractors rather than full-time employees can be a matter of convenience, even for engineers. “You don’t have to go through hiring committee, there’s not as much politics in getting the headcount, it costs a lot less money to the company, plain and simple.” Last month, The New York Times reported that Google has 120,000 contractors and temps and about 102,000 employees.

Still, Wednesday was hardly the first time Google’s shareholder meeting has been used as a venue to press the company on ethical concerns. Patrick Doherty, director of corporate governance for the New York State comptroller’s office and the final shareholder to speak, recalled that Google stopped censoring its search engine in China in 2010 because it was inconsistent with its values. Soon after, the Chinese government blocked Google.

“There’s a lot of similarities between Chinese Communist party and the board of Google,” John Harrington said at a tense shareholder meeting in 2008 when Amnesty International proposed changes to Google’s censored search in China, including disclosing censorship requests. The crowd tittered, but Harrington continued. “No, I’m serious. We need to think about it relative to majority rule.”

Page and Brin were both present at that meeting. The board urged shareholders to vote against the Amnesty International proposal, though Brin abstained from voting.

As Wednesday’s meeting closed, Doherty said he hoped Google’s executives remembered the commitments to their values made after their last foray into China.

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