Shopify Inc. (TSX: SHOP) announced today the results of its annual shareholders’ meeting, which saw the approval of all pending proposals across the board. This includes approving the “founder share”– essentially a trump card 40% voting power that CEO Tobi Lütke gets to keep for as long as he is connected with the company.
The meeting also greenlights the proposed 10-for-1 stock split. Shareholders on record by June 22 are expected to receive nine more shares on June 28, effectively divvying up the share price by a factor of 10.
The “founder share,” a new share class strictly for Lütke, is not transferable to his next of kin and he also stands to lose the founder share if he beneficially owns less than 30% of his current Class B shares. Excluding the founder’s vote, the proposal barely got shareholder support – only receiving 53.68% of the votes in favor and 46.32% of the votes against.
Currently, Class B shares hold the majority of the voting power at 5`1%. Since the approval has been handed, Shopify Director John Phillips will now convert all Class B shares held by his Klister Credit to Class A. Along with Lütke’s founder share, this effectively shifts the majority voting power to Class A shareholders at 59%.
The company’s shares have been in constant decline since the start of the year, falling by 68%. Lütke, President Harley Finkelstein, and CTO Allan Leinwand have made pronouncements that they’ve been buying company shares in the open market, aiming to project confidence in the company amid the slump.
Shopify Inc. last traded at $491.32 on the TSX.
Information for this briefing was found via Sedar and Shopify. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.