Proposal appears to have squeaked through because of a single influential director
The B shares, which aren’t listed on an exchange, carry 10 votes each, giving Phillips just enough power to tip the vote in favour of Lütke despite the opposition of the much larger group of common shareholders, according to Glass Lewis.Article content
In fact, if Klister’s shares had been counted as having only one vote each instead of 10, the proposal would have been soundly defeated, 65 per cent to 35 per cent, Glass Lewis said in a blog post. “The vast majority of minority shareholders who opposed the new multi-class arrangement, only to see it edged over the line by the existing multi-class structure, may feel aggrieved by the outcome,” the advisory firm said. Glass Lewis questioned why “the Phillips family was permitted to participate with a 10:1 advantage in the vote of ‘disinterested’ shareholders.”
The founder share guarantees that Lütke will hold at least 40 per cent of the voting rights at the Ottawa-based company under certain conditions, including that he remains at the firm.Article content Leading up to the meeting, Glass Lewis and Institutional Shareholder Services Inc. recommended that investors vote against the founder-share proposal. Three major public funds — Canada Pension Plan Investment Board, the Caisse de Dépôt et Placement du Québec and California Public Employees’ Retirement System — have disclosed that they voted against it.
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