Under Armour Inc. investors approved the creation of a new class of shares that don’t have voting rights, which will maintain founder and Chief Executive Officer Kevin Plank’s control of the sporting-goods maker.
The vote was a formality because Plank controls 67 percent of the voting rights thanks to his ownership of Class B shares, which have 10 times the votes of the Class A shares that outside investors can buy. Investors will receive one share of the new, nonvoting Class C stock for each Class A or Class B share they hold. The move has the effect of a 2-for-1 stock split and allows Plank to sell shares without losing any control.
The athletic brand announced the plan in June, and while it drew criticism from some corporate-governance watchers, at least one large Under Armour investor approved of Plank maintaining his control because of how he’s guided the company.
“When we are investing in Under Armour, we are really investing in Kevin Plank,” Michael Baron, a vice president with Baron Capital Inc., which owns 5.5 million shares, said in June. “We feel extremely comfortable with him in control. He’s a great executive.”
Diane Pelkey, an Under Armour spokeswoman, said Wednesday in an e-mail that the measure was approved.
Even with the recent drop in global stock markets, Under Armour’s shares were still up 28 percent this year through Tuesday. The Baltimore-based company continues to post robust growth, with sales gaining 29 percent last quarter.