Shopify CEO Tobias Lütke at the New York Stock Exchange.The Globe and Mail
Shopify Inc.’s SHOP-T chief executive officer Tobias Lütke could earn proceeds worth hundreds of millions of dollars by selling company stock this year, and has already filed to sell tens of millions of dollars’ worth this month, filings show.
On Friday, the Ottawa-based e-commerce company said that Mr. Lütke had entered into an automatic securities disposition plan to sell up to 1,987,032 class-A subordinate voting shares, held both directly and indirectly.
Shopify shares traded at $176.78 on the Toronto Stock Exchange at the end of the day Friday. If all sold at that price, those shares would generate gross proceeds of approximately $350-million.
Automatic share disposition plans enable executives to lock in stock sales in advance. The plan allows trades to be made in accordance with prearranged instructions given when Mr. Lütke was not in possession of material non-public information regarding Shopify, the company said in filings Friday.
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The agreement covers class-A shares he currently owns directly, those that he would receive upon converting class-B restricted multiple voting shares – shares he would receive when exercising options and other share units, or held indirectly in two controlled entities, 7910240 Canada Inc. and Thistledown Foundation.
On Friday, Mr. Lütke informed the United States Securities and Exchange Commission that he intends to sell several blocks of shares over the next three months, starting on the estimated date of March 18, the first eligible day under the new plan. Some of these shares come from recently vested share units, and others were gifts.
These blocks, representing about 720,000 total shares which Mr. Lütke obtained at various price points, were worth an aggregate value of about $117.4-million, according to a submitted calculation based on the company’s share price on Feb. 25.
Shopify’s stock has broadly been on the mend in recent years since its 2022 decline, and is up about 32 per cent from the same time last year. However, the share price has taken several hits in recent months on concerns about competition from artificial intelligence, and other factors.
Mr. Lütke previously had share disposition plans from 2017 to 2021, and another from mid-2024 until the end of last year. This plan extends until the end of 2026.
In the SEC filling, Mr. Lütke also disclosed that he made gross proceeds of $16-million on Dec. 16 when selling a block of class-A subordinate voting shares.