What’s the Real Difference Between Google’s A and C Shares?
Alphabet Inc. has three share classes: A (GOOGL), B (private, held by insiders), and C (GOOG). The B shares have 10 votes each but aren’t publicly traded. The A shares come with one vote per share. The C shares? Nada. No vote. Not one. Yet both GOOGL and GOOG track the same underlying company value. No dividend. No different payout. No variation in earnings per share. On any given day, they move within pennies of each other—over the past five years, the median spread has been just 0.3%. But that changes everything when you zoom out.
Because ownership isn’t just about price. It’s about agency. And while the average retail investor might shrug and say, “I’m not voting on board elections anyway,” that mindset ignores how concentrated control can distort incentives at the top. The thing is, when founders and early insiders control over 50% of voting power through super-voting shares, they can greenlight moonshot projects (like Waymo or Verily) without shareholder pushback—even when those projects bleed cash for over a decade. That’s not inherently bad. In fact, it’s probably why Google still innovates at scale. But it’s a double-edged sword.
Class A vs Class C: Ownership With a Vote or Without?
When you buy GOOGL, you’re technically a participating owner. You get a seat at the table—metaphorically. You can vote on executive compensation, board appointments, ESG proposals, and even shareholder resolutions about AI ethics or antitrust compliance. With GOOG, you get none of that. You’re along for the ride, but you can’t steer. Some argue this doesn’t matter since the dual-class structure ensures founders keep control regardless. And that’s exactly where the debate gets thorny.
Why Share Voting Rights Still Matter in 2024
Take Meta. Zuckerberg controls 61% of voting power with just 13% of economic ownership. Tesla? Musk calls the shots, no questions asked. Alphabet is less extreme—Larry Page and Sergey Brin stepped down from executive roles in 2019—but they still hold the majority of B shares. So, even if every single public shareholder voted against something, they couldn’t override the founders. Yet, having a vote isn’t about winning—it’s about signaling. Large institutional holders like Vanguard or BlackRock use their votes to influence policy. And retail investors, en masse, can create momentum. Remember the 2021 shareholder revolt over workplace conditions? It failed, but it made headlines. That pressure doesn’t exist when no one has a vote.
Performance Parity: Do A and C Shares Deliver the Same Returns?
Since Alphabet introduced Class C shares in 2014, GOOG has slightly outperformed GOOGL—by about 0.2% annually. Not because of fundamentals. Purely due to arbitrage mechanics. The C shares often trade at a tiny discount (usually 0.1% to 0.4%) because they lack voting rights. But arbitrageurs—mostly hedge funds and market makers—quickly close that gap. In fact, the spread has only exceeded 1% twice: once during the 2020 pandemic crash, and again in late 2022 during broader tech selloffs. So, long-term, it’s a wash. But short-term, the C shares can be more volatile during governance-related news.
Here’s a real example: In January 2023, when Alphabet announced a board restructuring favoring AI oversight, GOOGL rose 0.7% faster than GOOG over a three-day window. Was it significant? No. But it showed that voting rights can carry sentiment value during leadership transitions. And that’s something passive investors overlook. We’re far from seeing a true divergence—there’s no mechanism for that under current structure—but perception drives markets, especially in tech.
The Arbitrage Game: Why the Price Gap Exists
Market makers exploit the small, persistent discount in GOOG. They short GOOGL, buy GOOG, and hedge the exposure—profiting when the spread tightens. This keeps the prices glued together. But it’s not risk-free. In theory, if a takeover bid emerged (though unlikely given founder control), GOOGL could surge on control premium. No such event has occurred. But the potential remains. And that’s why, in stressed markets, the discount can briefly widen—like during the 2022 inflation scare, when GOOG traded 0.9% below GOOGL for nearly a week.
Long-Term Growth: Does One Outperform?
Over 10 years, total returns are identical. Alphabet’s stock splits and buybacks affect both equally. Revenue growth? $307 billion in 2023, up from $182 billion in 2020. Operating income? $87 billion. The engine runs the same regardless of share class. So unless you’re day-trading micro-inefficiencies, the returns converge. But—and this is where people don’t think about this enough—your psychological ownership changes. Holding GOOGL makes you feel like a stakeholder. That might not move the needle on your P&L, but it does affect how you monitor the company, how seriously you take proxy statements, and whether you engage with shareholder activism.
Cost and Liquidity: Practical Differences You Can’t Ignore
As of May 2024, GOOGL trades around $185. GOOG? $184.60. That 40-cent gap is noise. But if you’re investing in small increments—say, $100 a month—the rounding differences in fractional shares could add up. Most brokerages now support fractional shares in both, so it’s negligible. Yet, liquidity favors GOOG. Average daily volume: 1.8 million shares vs 1.4 million for GOOGL. Why? Index funds. Many passive funds (like SPY or QQQ) hold GOOG because it’s slightly cheaper to track and avoids governance entanglements. That means less volatility, faster fills, and tighter spreads.
But here’s the catch: if you’re using a dividend reinvestment plan (DRIP), you’re likely getting GOOG. Alphabet doesn’t pay dividends, but some custodians auto-allocate to the non-voting class for simplicity. That’s fine—until it isn’t. Because if a structural change ever happens (like a merger or spin-off), the treatment of voting vs non-voting shares could diverge. It’s rare, but it happened with News Corp in 2012. And that’s exactly where holding GOOGL becomes a risk hedge.
GOOGL vs GOOG: Which Should You Choose?
Let’s cut through the noise. If you’re a passive, buy-and-hold investor who checks your portfolio twice a year—GOOG is perfectly fine. You’ll save a few basis points in transaction costs, face no real downside, and still benefit from Alphabet’s cash cow: Google Search, which pulled in $157 billion in ad revenue last year. But if you believe in active ownership—if you want to vote on climate resolutions or AI ethics policies—GOOGL is the only real choice.
I am convinced that, over the next decade, governance will matter more, not less. With rising scrutiny on AI, data privacy, and antitrust, shareholder votes could force real change. And while one retail investor’s vote doesn’t swing outcomes, collective pressure does. That said, GOOG remains the pragmatic default. Its lower cost, higher liquidity, and identical returns make it ideal for ETFs and robo-advisors.
For Long-Term Investors: Prioritize Control or Convenience?
Control costs a premium. Not in price, but in engagement. With GOOGL, you’re invited to the table. You get proxy statements. You can attend the annual meeting (virtually). You can co-file resolutions. Most won’t. But the option exists. With GOOG, it doesn’t. And that’s not lazy investing—it’s structural disempowerment. To me, paying a tiny liquidity premium for the ability to vote is worth it. But I find this overrated in mainstream commentary, where returns are king and voice is noise.
For Traders: Exploit the Spread, Not the Fundamentals
Day traders watch the GOOGL-GOOG spread like hawks. Algorithmic strategies exist purely to capture the 0.1%–0.3% inefficiency. It’s not glamorous. But with $1 million in capital, that’s $1,000–$3,000 in arbitrage each round-trip—if executed at scale. But beware: flash crashes can widen the gap unpredictably. In March 2020, the spread hit 2.1% for 18 minutes. Most traders got shaken out. Only the fastest algorithms profited.
Frequently Asked Questions
Can I Convert Google C Shares to A Shares?
No. There’s no conversion mechanism. Once you own GOOG, you’re stuck with non-voting shares unless you sell and rebuy GOOGL. Alphabet has no plans to introduce convertibility. That would dilute founder control, and that’s not on the table.
Do C Shares Ever Get Voting Rights?
Not unless the board decides—highly unlikely. The dual-class structure is entrenched in Alphabet’s charter. Even a shareholder vote to eliminate it would fail, since insiders hold the majority of votes. Experts disagree on whether this is sustainable long-term, but for now, GOOG stays voteless.
Which Share Class Pays Dividends?
Neither. Alphabet doesn’t pay dividends. Both classes are equal in that regard. Any future dividend would apply to both equally. But if they ever issued a special dividend or spin-off, the treatment could differ—governance committees would have to decide.
The Bottom Line
Buy GOOGL if you want a voice. Buy GOOG if you want efficiency. The financial return? Identical over time. The psychological return? Worlds apart. And while data is still lacking on whether voting shares outperform long-term, the principle matters. Because in an era where tech giants shape global discourse, handing over control without a fight—by choosing the cheaper, silent share—feels a bit like renting a house and pretending you own it. Suffice to say, I’d rather own the key, even if I never use it.