(Bloomberg) — Shopify Inc. said it plans a 10-for-1 stock split and 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 Canadian e-commerce software firm said Monday that the new structure would “strengthen the foundation for long-term stewardship by Mr. Lutke,” the company’s founder. Under the plan, Lutke, his family and his affiliates would together retain 40% of the votes at the company, even as their ownership stake changes.
Shopify was down 0.1% at $602.59 in New York at 9:43 a.m.
Lutke, 41, would have to give up his founder share if he’s no longer with the company as an executive, director or consultant, Ottawa-based Shopify said in a statement Monday. He wouldn’t be allowed to transfer it to anyone else.
He would also forfeit the special share if his ownership stake — including family members and affiliates — drops below 30% of the number of class B shares they have today.
Shopify soared above C$250 billion ($198 billion) in market value during the pandemic as online selling took off, but it has given back most of those gains.
Read More: Shopify’s Slump Proves That It’s No Amazon
The shares are down 56% this year amid a selloff in richly valued technology stocks — costing Lutke about $6.3 billion in personal wealth. He’s still one of the richest Canadians, with a net worth of $5.5 billion, according to the Bloomberg Billionaries Index.
Stock splits are in vogue in the technology sector after Alphabet Inc., Amazon.com Inc. and Tesla Inc. all got a boost from announcing plans to split their shares.
The changes require approval of a majority of Shopify shareholders, excluding Lutke and related parties. The vote will happen at a meeting on June 7.
Morgan Stanley is serving as Shopify’s financial adviser on the proposed changes and Skadden, Arps, Slate, Meagher & Flom LLP and Stikeman Elliott LLP as legal counsel, according to the company’s statement.
(Updates share price move in third paragraph.)
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