Here's How Shopify Chief Looks To Preserve Control

Shopify Inc SHOP sought approval to change its complex share structure to protect the voting power, including a 10-for-1 stock split, the Wall Street Journal reports.
Co-founder and CEO Tobi Lütke proposed a new “founder share” that, combined with his existing supervoting Class B shares, increased his voting power to 40% from 34%.
Lütke, 41, looked to retain the shares as long as he remained at Shopify.
Lütke looked to preserve control of the company by the move, said Robert Ashe, Shopify’s independent lead director.
The stock split made it easier to compensate employees and allow more individual investors access to the stock.
Shopify employees could choose between cash and stock in compensation packages.
Upon approval, Lütke will be able to hold the 40% voting control even if he sold a significant amount of his Class B shares.
The e-commerce company’s shares, which surged above $1,600 in 2021 during the pandemic, have fallen about 55% so far in 2022.
Under the current structure, if the proportion of supervoting Class B shares dropped below 5% of total shares outstanding, they would automatically convert to Class A shares, with any equity issuance for financing or acquisitions posing a threat to Lütke’s control.
Price Action: SHOP shares closed higher by 2.49% at $618.20 on Monday.