Schmidt: Smart move
San Francisco, Feb. 9 (Reuters): Google Inc executive chairman Eric Schmidt is selling roughly 42 per cent of his stake in the Internet search company, a move that can potentially net the former chief executive a $2.51 billion windfall.
Schmidt, 57, will sell 3.2 million shares of Class A common stock through a stock trading plan, Google said in a filing with the US Securities and Exchange Commission on Friday.
The plan, which Google said would give Schmidt “individual asset diversification and liquidity”, allows Schmidt to spread trades out over a period of one year to reduce the market impact.
A Google spokeswoman would not comment on why Schmidt was selling the shares at this time.
Wedbush Securities analyst James Dix said Schmidt’s stock sales did not worry him or signal a loss of confidence in the company.
“I’d be more worried if the current CEO or CFO sold a lot of their stakes,” said Dix.
Schmidt, who served as Google’s chief executive until 2011, owns around 7.6 million shares of Class A and Class B common stock. The shares represent 2.3 per cent of Google’s outstanding stock and around 8.2 per cent of the voting power of Google’s stock.
The fact that Schmidt will still own a significant amount of shares after the sales means he’ll have a good deal of “skin in the Google game”, said Needham & Co analyst Kerry Rice. But he said it could hint at Schmidt playing a less central role within the company going forward.
“My speculation is that Eric’s relationship with Google is evolving,” said Rice. “I would assume that as he decides he wants to diversify away from Google — both his career and financially — he’s got ideas of what he would like to do with some of his funds.”
Schmidt, who helped turn Google into the world’s No.1 search engine during his decade as CEO, handed the reins to Google co-founder Larry Page in April 2011.
As executive chairman, Schmidt has been particularly involved in government relations, taking a leading role in the company’s discussions with antitrust regulators in the US and the EU.