Investors in Shopify Inc. have agreed to give Chief Executive Officer Tobi Lutke special voting rights, ensuring his influence at the e-commerce software business he established.
Despite the recommendations of two famous advisory companies, shareholders approved a plan to create a “founder share” for Lutke. Under certain conditions, including his continued employment with the corporation, the move gives Lutke at least 40% of the voting rights at the company.
Shopify said that the idea would benefit shareholders by keeping Lutke active at the Ottawa-based company. He is not permitted to transfer the founder share to anyone.
The proposal needed a majority of votes cast by shareholders, excluding the shares he owns, to pass.
The proposal was announced by Shopify in April. Several weeks later, Glass Lewis & Co. and Institutional Shareholder Services Inc. advised investors to reject it. The California Public Employees’ Retirement System had signalled that it would vote no.
Shareholders also approved a 10-for-1 stock split.
As of 10:36 a.m. in New York, Shopify was up 2.6 percent to $370. This year, the stock has plunged 73%
Tobias Lutke, CEO and co-founder of Shopify. Getty Images