U.S. Listing Adjustment Mishandled, According to Mark Kleinman
In the world of finance, two significant stories have been making headlines recently. Firstly, the British startup Wise, formerly known as TransferWise, has found itself embroiled in a governance dispute over its move to a US listing and the proposed extension of a dual-class share structure. Secondly, Nationwide Building Society has faced criticism over its pay structure and a television advertisement that some claim was misleading.
Wise, founded by Taavet Hinrikus and Kristi Kaarmann, is currently valued at an impressive £10.5bn. However, its listing move has turned into a governance mess, with concerns over the proposed dual-class share structure that would grant enhanced voting rights to certain insiders, including CEO Kristo Käärmann. Co-founder Hinrikus and some shareholder advisory firms have accused Wise of misleading investors by bundling the US listing and governance changes into a single vote, effectively forcing shareholders to accept both together without a separate vote.
The dispute has led to claims of procedural unfairness, criticisms about disclosure practices, and hints at potential court challenges over control and power distribution within the company as it transitions its main listing from London to the US stock market. Wise argues that its approach complies with legal standards for the listing scheme and rejects the notion that the votes should be split. Despite the objections, the proposal passed with strong majority support in July 2025.
Meanwhile, Nationwide has been under fire for its pay structure, with its chairman, Kevin Parry, defending the CEO's £7m pay deal as not being lavish due to money not being the primary motivation. This controversial pay structure has been a topic of discussion for years, with Dominic West's portrayal as a rapacious bank manager in a popular advertisement campaign adding fuel to the fire.
In the realm of accounting, KPMG has seen a shakeup with Jon Holt, the UK chief executive since 2021, achieving record profits per partner last year through tougher cost management. If Holt is successful in securing the International chairmanship, a vacancy at the top of the UK firm could potentially arise. The race for the chairmanship of KPMG International is on, with Holt seemingly likely to stand for the role next year.
Mark Kleinman, City Editor for Sky News and a weekly columnist for City AM, has been reporting on these developments. The handling of Wise's listing move has been compared to other City fiascos in recent times, while the governance issue surrounding the startup's move to a US listing involves controversy over its proposal to extend a dual-class share structure that grants enhanced voting rights to certain insiders.
In a twist of events, Skaala, a vehicle owned by Hinrikus, opposed a decade-long extension of dual-class voting rights, which would entrench Käärmann's power over the company until after 2035. Skaala accused Wise of misleading investors over the views of proxy advisors and giving a "legally and commercially inaccurate" account of the options open to Wise in relation to a shareholder vote on the dual-class structure.
Wise should have set out publicly why it declined to pursue an alternative that would have been substantially fairer to independent shareholders, according to critics. Skaala proposed two alternative schemes of arrangement, both facilitating the US dual-listing, but offering shareholders the choice to approve it either with or without the 10-year extension of the dual-class voting rights.
The dust has yet to settle on these controversies, with Monday's Extraordinary General Meeting (EGM) seeing the key resolutions approved, but nobody emerges from this affair with their reputation enhanced. Tracey Graham, the non-executive director who chairs the mutual's remuneration committee, stated that it needed to pay competitively to prevent executives from defecting to rivals.
As these stories unfold, it's clear that transparency, fairness, and clear communication are crucial in maintaining trust and reputation in the financial sector.
In the financial sector, the British startup Wise, formerly known as TransferWise, faces criticism over its proposal to extend a dual-class share structure during its transition from a London to a US stock market listing, and the alleged misleading of investors about the options available. Meanwhile, Nationwide Building Society's pay structure and alleged misleading advertisement have also garnered public scrutiny. The technology industry, in this case, Wise, and the business world, represented by Nationwide, are confronted with the importance of transparency, fairness, and clear communication to maintain trust and reputation in finance.
