Novo Nordisk is organised under Danish law as a public limited liability company.
Novo Nordisk’s share capital is divided into A shares and B shares.
Shares and voting rights
Novo Nordisk’s share capital is DKK 530,000,000, which is divided into an A share capital of nominally DKK 107,487,200 and a B share capital of nominally DKK 422,512,800.
Each A share of DKK 0.01 carries 10 votes, whereas each B share of DKK 0.01 carries one vote. Thus, each B share of DKK 0.2 (the present denomination of the company's shares) carries 20 votes and each A share of DKK 0.2 carries 200 votes.
On 2 January 2014 the B shares were split in a five-for-one ratio and the trading unit of the B shares listed on NASDAQ Copenhagen was changed from DKK 1 to DKK 0.2. On 9 January 2014, each of Novo Nordisk’s American Depository Receipts (ADRs) listed on New York Stock Exchange was also split in a five-for-one ratio. Hence, the ratio of B shares to ADRs listed on the New York Stock Exchange remains 1:1.
Special rights attached to A shares include pre-emptive subscription rights in case of an increase of the A share capital, pre-emptive purchase rights in case of a sale of A shares and priority dividend if dividend is below 0.5%. B shares take priority for dividend between 0.5% and 5%, and B shares take priority for liquidation proceedings. However, in practice, A shares and B shares receive the same amount of dividend per share of DKK 0.01.
The Board may issue new shares or buy back shares in accordance with authorisations granted by the general meeting and recorded in the meeting minutes.
In March 2014, the Annual General Meeting of the company approved a reduction of the company's B share capital from DKK 442,512,800 to DKK 422,512,800 by cancellation of 100,000,000 B shares of DKK 0.20 each from the company's own holdings of B shares at a nominal value of DKK 20,000,000, equal to 4.5% of the total share capital. The reduction of the company's B share capital was implemented on 23 April 2014 after expiry of the statutory notice period to the creditors.
Listings and transferability
All A shares are held by Novo A/S, a Danish public limited liability company fully owned by the Danish self-governing foundation, the Novo Nordisk Foundation. The A shares are not listed but are in principle transferable. However, according to the Articles of Association of the Foundation, the A shares cannot be divested by Novo A/S or the Foundation.
The B shares are listed on NASDAQ Copenhagen and on the New York Stock Exchange as American Depository Receipts (ADRs) under the symbol NVO, and there are no transferability restrictions on the B shares.
Exercise of votes and control
The A shares held by Novo A/S currently represent 20.28% of the capital and 71.78% of the total number of votes in the company. In addition, Novo A/S holds 6.18% of the total capital as B shares. Holding 26.46% of the total share capital, Novo A/S controls 73.97% of the total number of votes. The figures related to the number of votes do not take into account treasury shares (own shares) held by Novo Nordisk.
Novo Nordisk is not aware of the existence of any agreements between shareholders on the exercise of votes or control.
The stake held by board members and employees cannot be determined exactly, however, Novo Nordisk estimates that as of January 2014, the B-shares held by Novo Nordisk board members and employees represent less than 1% of the capital and less than 1% of the total number of votes in Novo Nordisk.
Multiple voting rights
Novo Nordisk is of the opinion that the current share and ownership structure of Novo Nordisk serves the interests of the shareholders and the company well as it provides strategic flexibility to pursue Novo Nordisk’s vision and a good balance between long-term shareholder value creation and competitive shareholder return in the short-term.
A study commissioned by the European Commission concluded in 2007 that control-enhancing mechanisms such as the A and B share structure are allowed in all European countries investigated and that they do not have a negative impact on shareholder value creation.
It is Novo Nordisk’s opinion that the company's transparent share structure is to the benefit of its shareholders who know in advance the relative voting power of each share class.
The current differentiation of voting rights cannot be revoked, as this would violate the Articles of Association of the Foundation, which have been approved by the Danish authorities.