Shopify shareholders will vote on executive pay, proxy advisors urge rejection

OTTAWA – This morning, Shopify Inc. shareholders. will vote on whether to approve the e-commerce giant’s executive compensation plan.

Prominent proxy advisors Institutional Shareholder Services and Glass Lewis have recommended that shareholders vote against a plan that would result in the company paying its top executives multimillion-dollar salaries and stock and option awards.

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

It also condemns the fact that the company awarded Chief Operating Officer Kaz Nejatian $75 million in stock options and restricted stock units, which are not subject to performance vesting conditions, in exchange for a 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 comparable, even though the company has moderately underperformed its peers.

Last year, just 78 percent of Shopify shareholders voted in favor of the executive compensation plan, down from the previous five years when support averaged 94 percent.

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

Companies in this story: (TSX:SHOP)

Canadian Press