Shopify Inc. announced a number of proposed changes to its governance and share structure on Monday, including a new class of shares it wants to create to ensure its founder and chief executive, Tobi Lütke, can be shielded from short-termism.

In a release, the Canadian e-commerce company announced it wants to create a new Founder share that would effectively ensure Lütke controls 40 per cent of Shopify’s total voting power.

The proposal is subject to a sunset clause that would be triggered if he is no longer serving as an executive, director or consultant whose primary assignment is Shopify. The arrangement also requires Lütke to retain a stake equivalent to at least 30 per cent of the company’s Class B shares, each of which has 10 votes.

“These changes will enhance Shopify's strategic flexibility and ability to pursue value-enhancing organic and external opportunities. Tobi is key to supporting and executing Shopify's strategic vision and this proposal ensures his interests are aligned with long-term shareholder value creation,” said Robert Ashe, Shopify’s lead independent director, in the release.

In a report to clients, National Bank of Canada Financial Markets Analyst Richard Tse said changes to the capital structure are designed to maintain a long-term focus on projects like building out the Shopify Fulfillment Network.

In a conference call with analysts on Feb. 16, Shopify Chief Financial Officer Amy Shapero said the company is expecting US$1 billion in capital expenditures tied to the fulfillment network over 2023 and 2024, with volumes set to progressively scale up to toward the end of 2023.

“We think the board likely believes the company requires Mr. Lütke to execute such strategy and signals the board’s continued confidence in Mr. Lütke despite the pullback in the stock price from its peak,” Tse wrote in his report. He has an outperform (the equivalent of a buy) recommendation on Shopify, and a price target of US$1,500.00.

Shopify stated in its release Monday that if shareholders approval the proposal, then John Phillips — who sits on the company’s board — would convert all the Class B shares held by him and his wife into Class A shares. According to the company, that conversion would result in total Class A voting power rising to 59 per cent from 49 per cent.

“My fellow directors and I are confident that shareholder approval of this proposal will provide Shopify with new tools to position the Company for long-term success as it builds on its impressive track record of value creation with Tobi at the helm,” Phillips said in a release.

Shopify also announced its board of directors has proposed at 10-for-1 stock split. The company’s shares have been taken for a wild ride during the pandemic. After soaring almost 367 per cent from mid-March 2020 to their high last November, they shed almost two-thirds of their value since then through the close of trading Friday.

Both proposals are subject to shareholder approval at Shopify’s annual meeting on June 7.