Wise’s intention to relocate its primary listing to the United States has garnered criticism from co-founder Taavet Hinrikus and proxy advisory firms. The upcoming vote not only addresses the move but also seeks shareholder approval to extend the company’s dual-class share structure.
When Wise went public in London in 2021, it adopted a dual-class share structure that allowed a limited group of investors to maintain control over the company. Originally slated to expire in 2026, the proposal to shift the listing to New York includes a resolution to extend this structure until 2036.
Recently, Hinrikus, who holds over five percent of Wise through his Skaala Investments OÜ, expressed his disappointment to Sky News that proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS) did not recommend rejecting the dual-class extension. He stated, “We are eager to discuss this with them and encourage them to revise their reports prior to the vote.”
In a subsequent report, Glass Lewis registered concerns about extending the sunset provision, noting, “We believe multi-class share structures with unequal voting rights generally do not align with the best interests of common shareholders.” Similarly, another advisory firm, PIRC, is urging shareholders to oppose the proposal due to the dual-class share provisions.
In defense, Wise has articulated that the dual-class structure is a crucial aspect of its listing strategy, requiring a vote on a single proposal via a scheme of arrangement. The company emphasized its commitment to shareholder democracy and governance principles, proposing that a supermajority of 75% shareholder support is necessary for each class of shares based on a ‘one share, one vote’ standard.