Shopify Proposes Founder Share For CEO, New Stock Split Strategy

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Shopify has announced a new strategy to split the company’s shares to make them more attractive to investors.

The Company opted for a 10-to-1 split of its Class A and Class B shares. Currently, the Company’s Class A shares hold one vote per share and Class B shares hold 10 votes per share.

Shopify is also proposing a Founder share, which is still requires the approval of shareholders to authorize. The Founder share is a new class of shares intended to retain the voting rights of the founder in this case, Tobi Lutke.

The Founder share provides Lutke with a variable number of votes. Together with his existing shares from other classes, this would represent 40% of the total voting rights that are linked to all outstanding Shopify shares.

The proposal says Lutke will only hold the Founder’s shares if he is an executive at Shopify or a board member.

Tom Forte, an analyst at D.A. Davidson & Co, said the brokerage generally opposes founding shares because they are not in the best interests of shareholders. However, the proposal may be accepted since Lutke has an excellent track record.

The sources for this piece include an article in Reuters.



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