(Shopify) Shopify is proposing a 10-for-1 stock split in a move that seeks changes to its share structure to protect the company’s voting power.
The Canadian e-commerce giant said it wants to create a new Founder share that would ensure that CEO Tobi Lütke controls 40% of the company’s voting power.
Under a new arrangement, Lütke will retain a stake equal to at least 30% of the company’s Class B share, each with 10 votes.
The proposal would be subject to a sunset clause that would become effective if Lütke is no longer acting in CEO capacity, a director, or consultant involving Shopify. The company believes Lütke is key to Shopify’s strategic vision and interests.
Shopify says it believes the proposed changes will enhance its strategic flexibility and ability to pursue value generating opportunities.
If the new changes are approved, John Phillips, who sits on Shopify’s board, would convert his Class B shares he holds and those of his wife into Class A holdings. The conversion would raise the Class A voting power to 59% from 49%.
The final decision will now be made during the company’s annual general meeting on June 7. The changes happen amid about two-third decline in Shopify stock since November highs following a pandemic 367% rally.
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