Shopify Inc. shareholders voted to solidify founder and CEO Tobi Lütke's voting power for as long as he is at the company andensurehe, his family and affiliates will hold 40 per cent of the company's voting power.
The company now joins a growing list of businesses that have split their shares to make them more appealing to investors.
At its upcoming Annual and Special Meeting of shareholders on June 7, the eCommerce giant said it plans to seek shareholder approval for the 10-for-1 stock split of its common stock. In a statement, it noted that the proposed split will make ownership more accessible to investors.
Other major companies to announce split proposals include Alphabet Inc., Amazon.com Inc. and Tesla Inc.
Under the previous structure, Lütke's control over the company was threatened if the proportion of class B shares ever fell below 5% of total shares outstanding. Those shares would then automatically be converted into class A shares. This would mean that any issuance of new shares would diminish Lütke's voting power.
The votes come after Shopify shares plunged from a 52-week high of $2,228.73 in November to a low of $402 in mid-May. The stock closed at $476.52 on Tuesday, up $23.98 or 5.3 per cent.
Shopify also announced it will give chief executive officer Tobi Lutke a special “Founder share” that will preserve his voting power as long as he’s at the company. The proposal aims to maintain Lutke’s voting power. The Founder share will provide him with a variable number of votes, and that, combined with his previously owned shares from other classes, would represent 40 per cent of the total voting power attached to all of Shopify’s outstanding shares.
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