MicroStrategy's Michael Saylor Loses Voting Control Amid Structural Changes

According to Odaily, Michael Saylor, the Executive Chairman of MicroStrategy, has lost his voting control over the company. Historically, MicroStrategy's dual-class share structure separated equity ownership from voting rights. As of October 21, Saylor held 51.7% of the total voting power of MicroStrategy's common stock. His overwhelming control over Class B shares, which carry ten times the voting power of Class A shares, allowed him to maintain majority control despite a reduced percentage of equity exposure. Nasdaq classifies MicroStrategy as a "controlled company" due to Saylor's singular control over company management and decision-making, such as shifting the company's focus from software to Bitcoin acquisition. Under Nasdaq governance rules, controlled companies are not required to have an independent board of directors, compensation, or nominating committees. MicroStrategy is also exempt from having independent directors determine Saylor's compensation or that of advisors and legal counsel. However, Saylor's voting control has now fallen below 50% due to the issuance of a significant amount of stock and debt to purchase Bitcoin. Despite the Class B shares having ten times the voting power of Class A shares, the sheer volume of Class A shares issued has resulted in their voting power surpassing that of Class B shares. Approximately a week ago, MicroStrategy established a new board nominating committee led by Carl J. Rickertsen and adopted a new nominating committee charter. Further details regarding Rickertsen's nomination and the powers granted by the new charter will be disclosed in future SEC filings, expected no later than the company's next quarterly report scheduled for mid-February 2025. As of the time of reporting, MicroStrategy's market capitalization stands at $111 billion, with Bitcoin holdings valued at $31 billion.