British fintech Wise Plc (OTC:WIZEY) secured shareholder approval this week for its controversial move to a U.S. primary listing, but the victory exposed significant shortcomings among proxy advisory firms that could concern institutional investors.
Proxy Advisers Miss Key Details In High-Stakes Vote
ISS and Glass Lewis, the industry’s dominant proxy advisers, initially failed to identify critical governance issues in Wise’s proposal. The firms missed that the company bundled its U.S. listing plan with a decade-long extension of dual-class voting rights—a structure typically opposed by both advisers, reported Financial Times.
Governance Concerns Surface After Vote Campaign
The oversight only came to light when Taavet Hinrikus, Wise’s co-founder and third-largest investor with 5.1% ownership, publicly criticized the “all or nothing” approach, the Guardian reported. Hinrikus argued Wise betrayed its commitment to “radical transparency” by combining separate issues into one vote.
Both ISS and Glass Lewis eventually updated their reports, acknowledging governance concerns but maintaining their support recommendations. Meanwhile, smaller adviser PIRC initially backed the proposal before reversing course and recommending against it.
Shareholders Approve Despite Controversy
Despite the advisory confusion, Wise shareholders overwhelmingly approved the move Monday. Class A shares voted 91% in favor while Class B shares supported the measure 84.5%—both exceeding the required 75% supermajority threshold.
The vote grants CEO Kristo Käärmann enhanced control, converting his 18% economic stake into 55% voting power (capped at 50%). The dual-class structure, originally set to expire next summer, now extends through 2035.
Market Impact and Investor Implications
Wise expects the US listing to launch in the second quarter of 2026, targeting America’s deeper capital markets and $11 billion valuation growth. Chairman David Wells said the “strong mandate” allows focus on “moving trillions” in cross-border payments, according to the Guardian report.
The proxy advisory missteps raise broader questions about institutional oversight quality. While UK Financial Reporting Council research shows advisory influence isn’t absolute, the Wise episode demonstrates gaps in due diligence that could affect portfolio management decisions across diversified holdings, according to the FT report.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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