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NEW YORK (AP) -- Google Inc. tried to democratize the IPO process through its unusual auction, but its corporate governance is anything but shareholder-friendly, according to an influential proxy adviser.
Institutional Shareholder Services has relegated newly public Google to the governance basement, ranking the search-engine company lower than any company in the S&P 500 stock index.
Negatives outweighed the positives in both board practices and takeover defenses, including perhaps the governance attribute that has drawn the most criticism in the months leading up to last week's pricing - its dual class capital structure with unequal voting rights.
Google also requires a supermajority vote to approve certain mergers and business combinations, the Rockville, Md. proxy advisory firm said.
A Google spokesman declined comment.
Google is not part of the S&P 500 index. But because of its market capitalization, the company's governance is sized up against the index for comparative purposes, an ISS spokeswoman said. ISS compares the Mountain View, Calif.-based company to the index because of its market capitalization.
Among other governance attributes that lowered its CGQ, less than two-thirds of Google directors are considered "independent outsiders," by ISS and the nominating committee includes an "affiliated outsider."
It wasn't all negative.
ISS noted several practices as positive, including Google's separation of chairman and chief executive, its compensation committee being comprised solely of independent outside directors and its plans to hold board annual elections. Also, despite going public with several anti-takeover measures in place, the company doesn't have a poison pill and allows shareholders to call special meetings.