June 18th, 2024

Shopify shareholders approve exec pay plan, proxy advisers urged rejection

By The Canadian Press on June 4, 2024.

Shopify Inc. shareholders will vote this morning on whether to approve the e-commerce giant's compensation plan for executives. Shopify Inc. headquarters signage in Ottawa on Tuesday, May 3, 2022. THE CANADIAN PRESS/Sean Kilpatrick

OTTAWA – Shopify Inc. shareholders have approved the e-commerce giant’s compensation plan for executives.

Prominent proxy advisers Institutional Shareholder Services and Glass Lewis recommended shareholders vote against the plan, which could see the company hand out millions in salaries and share- and option-based awards to its top executives.

ISS says the plan has “significant problematic pay practices,” including a proposal that will compensate Shopify CEO Tobi Lütke with only a large stock option grant, equalling about US$20 million in each of the last three years.

It also disapproves of the company giving chief operating officer Kaz Nejatian US$75 million in stock options and restricted stock units that carry no performance-vesting conditions in lieu of his 2024 annual equity award.

Glass Lewis doesn’t like the plan because the adviser says it involves paying Shopify executives slightly more than leaders at companies it considers to be peers, despite the company performing moderately worse than its counterparts.

Just shy of 78 per cent of Shopify shareholders voted in favour of its executive compensation plan last year, down from the prior five years, when support averaged 94 per cent.

This report by The Canadian Press was first published June 4, 2024.

Companies in this story: (TSX:SHOP)

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