Google Must Embrace Sexual Harassment Shareholder Proposal in Wake of Cover-Up Allegations

Schmidt and Rubin

The revelation this week that Google made mega-payouts to two former executives accused of sexual harassment highlights the need for the adoption of a resolution by the National Legal and Policy Center (NLPC), which is a shareholder in parent company Alphabet Inc.

According to NLPC Chairman Peter Flaherty, “Alphabet’s management must end the stonewall. A necessary first step is to embrace our shareholder proposal on sexual harassment.”

According to disclosures related to a civil shareholder lawsuit that alleges Google consistently hid sexual harassment and discrimination claims by employees, former Android software creator Andy Rubin was paid $90 million upon his departure, and head of search Amit Singhal was offered $45 million when he left, although the amount was reduced to $15 million because he was hired by a competitor.

Information from the lawsuit says a former employee under Rubin claimed that he pressured her into oral sex, and another said Singhal groped her at an off-site event. The CEO of Alphabet, Google co-founder Larry Page, also awarded $150 million in stock to Rubin without receiving board approval. The complaint says Page – who along with fellow co-founders Sergei Brin and Eric Schmidt exercise great autonomy in decision-making authority over the company, despite it being publicly traded – later gained directors’ “rubber stamp” approval for the 2014 payout to Rubin.

“The new allegations shed light on Page’s power to compensate top executives and could add fuel to criticism that the company’s board isn’t strong enough to keep management accountable to shareholders…,” Bloomberg reported. “Investors claim the board failed in its duties by allowing harassment to occur, approving big payouts and keeping the details private.”

Rubin’s attorney says he admits to being in a consensual relationship with a Google employee, but denies any misconduct. Google has told media in a statement “there are serious consequences for anyone who behaves inappropriately” at the company, and that “we’ve made many changes to our workplace and taken an increasingly hard line on inappropriate conduct by people in positions of authority.”

A shareholder proposal sponsored by National Legal and Policy Center, which will be presented at Alphabet’s annual meeting in June, calls to account these self-governing executives who have advocated consistently for progressive causes while virtually condoning sexual harassment in their midst.

“This hypocrisy threatens the Company’s reputation…,” the NLPC resolution states. “Several public companies have lost billions in market capitalization shortly after executives have been accused of sexual misconduct, prompting lawsuits by shareholders.”

Each of the co-founders – Page, Brin and Schmidt – have had “dating” relationships with Google underlings in the past, and Schmidt left the chairmanship of Alphabet in late 2017 under the cloud of the corporate “#MeToo” reckoning that continues today, but he retains his board seat.

As further evidence of widespread problems at Google, the resolution notes that thousands of employees walked out in protest following the report of the millions of dollars in payouts to the accused executives.

“The Company can take measures to manage and improve risk oversight and by doing so, signal to employees – and investors – that the Board and management are committed to ensuring a safe workplace,” the resolution says.

NLPC’s proposal seeks greater transparency in how it treats claims of misconduct against its management, including the quantity and costs of settling such claims, as well as requiring a review of all policies related to how Google/Alphabet addresses such grievances. Shareholders and employees need not be blindsided repeatedly by the latest allegations exposed by the New York Times again and again.

And NLPC also suggests Google pursue efforts to achieve ideological, political, religious and geographical diversity in its employment ranks.

“A less monolithic company culture,” NLPC advises, “where differences are actually celebrated and respected, will create a more inclusive workplace.”

Alphabet’s management has not yet indicated whether it will urge shareholders to support or oppose the resolution.