Shopify Shareholders Approve 10-for-1 Stock Split and Plan to Keep CEO Firmly in Control

Under terms of the stock split, shareholders of record on June 22 will receive nine additional class A or B shares after the close of trading on June 28 for each current share held. The Class A shares will begin trading on a split-adjusted basis on June 29.

In announcing the proposal in April, Shopify said the founder share will provide Lütke “with a variable number of votes” that, combined with Class B supervoting shares held by him, his family, and affiliates, will represent 40% of the total voting power in the company’s shares, “effectively setting and preserving” his voting power at that level. The founder share proposal had been opposed by the shareholder advisory firms Glass Lewis and Institutional Shareholder Services.

“The new structure more closely aligns the company’s governance profile with its long-term market opportunities, positioning Shopify to remain mission-driven and merchant-obsessed while sustaining an innovative culture,” the company said. Shopify will maintain its primary dual-share structure, with Class A shares that carry one vote and Class B shares that have 10 votes each.

On Monday, Amazon.com ( AMZN
) shares began trading after the completion of a 20-for-1 stock split. Alphabet ( GOOGL
) has declared a 20-for-1 split that goes effective in mid-July. Both Tesla ( TSLA
) and GameStop ( GME
) have stated they plan to split their shares as well, although neither has provided details to date.

Shopify shares soared during the pandemic as companies rushed to create and expand their e-commerce operations. But the stock has come under intense selling pressure in recent months as investors backed away from high-multiple software companies and Shopify’s growth rate slowed. The stock is down almost 80% since peaking last November. In Tuesday’s regular session, the stock was up 5.6% to $380.74.

Write to Eric J. Savitz at eric.savitz@barrons.com