Shopify Inc is recommending changes to its governance structure to preserve the voting power of founder and CEO Tobi Lütke, according to a press release by Shopify on Monday.
- Under the new scheme, Shopify will give Lütke a founder share that will have a variable number of votes and will account for 40% of the total voting power assigned to all of the company’s outstanding shares.
- The founder share will not be transferrable and will sunset if Lütke no longer acts as the executive officer, board member, or consultant.
- The shares will also not be transferrable if Lütke, his immediate family, and his affiliates do not hold a number of Class A and Class B shares valued at nearly 30% of the class B shares they now hold.
The company is also proposing a 10-for-one split of its class A and Class B shares. The share split demands approval by a two-thirds majority vote by the class A and class B shareholders. SHOP is up +2.66%, CRM down -1.26%