Revolut is seeking investor approval for governance changes that would give chief executive and co-founder Nik Storonsky greater scope to borrow against his stake in the fintech without reducing his ownership.
Documents reviewed by the Financial Times show that the proposed amendments would increase the existing borrowing cap secured against Storonsky’s shares from $50m to $250m and remove current percentage limits on the amount of his holding that can be pledged without board approval.
The proposals form part of revised articles of association sent to investors as Revolut adjusts its governance arrangements following a sharp increase in its private-market valuation.
Under the existing structure, an employee holding more than 20% of the company’s ordinary shares can pledge up to 10% of that holding as security without board approval and a further 5% with backing from a majority of directors. Storonsky is the only employee above that ownership threshold.
The proposed articles would remove those proportional limits and expand the classes of shares that can be used as collateral. A $250m borrowing ceiling would remain, although a higher amount could still be approved by the board and 75% of shareholders.
The documents do not indicate that borrowing has taken place or that Storonsky intends to use the expanded capacity. The change would widen the financing flexibility available against his stake while allowing him to retain his equity exposure.
Founder wealth in a large private company can become heavily concentrated in shares that cannot be monetised as readily as listed securities. Pledging shares offers one route to personal liquidity without a sale, but it also creates governance considerations because the same equity represents ownership, voting influence, and exposure to movements in company valuation.
Revolut’s expansion has materially changed the scale of that equation. The fintech now says it serves around 75m customers globally after rapid international growth.
A recent employee secondary share sale valued the company at about $115bn, according to the FT. Storonsky is reported to own approximately 29% of the group, making the economic value of his stake substantially larger than when the existing borrowing threshold was established.
The proposed revision illustrates a recurring governance issue among rapidly growing private companies. Provisions written when a business is materially smaller can become detached from the value of the shares, incentive arrangements, and financing structures they were originally designed to regulate.
Founder ownership remains particularly significant at Revolut. Storonsky’s existing position gives him a substantial economic interest in the company’s performance, while incentive arrangements could increase that ownership if higher valuation thresholds are reached.
Revolut has also discussed a potential future public listing, although executives have indicated that an IPO would not take place before 2028. A flotation would bring greater external scrutiny of governance arrangements that institutional investors routinely examine before committing capital to public companies.
Share pledging is one of those arrangements because it can create an indirect connection between a shareholder’s personal financing and the value of the company’s equity. If shares used as collateral fall sufficiently in value, lending agreements can require additional security or repayment depending on their terms.
There is no indication that such an event is expected at Revolut. The current proposal concerns the permissions contained in the company’s articles rather than an identified borrowing transaction.
The changes also arrive as Revolut develops from a high-growth fintech into a much larger regulated financial institution. Its expanding banking operations increase the number of stakeholders examining ownership, governance, operational controls, executive incentives, and capital arrangements.
Large late-stage private companies increasingly have shareholder bases, executive reward structures, and international operations resembling those of listed groups, despite operating under different disclosure requirements.
Founder-led technology companies have frequently used substantial equity incentives to align executives with long-term growth targets. Such structures can preserve entrepreneurial control and reward value creation, but they also concentrate questions around dilution, voting influence, succession, and shareholder oversight.
Revolut’s latest financial performance has added to its private-market valuation. Pre-tax profit increased to £1.7bn on revenue of £4.5bn in its latest financial year, while the company has continued expanding banking and financial-service operations internationally.
Revolut told the FT that it routinely updates its articles so that its governance and administrative provisions reflect the scale and valuation of the company. The proposed share-pledge provisions form part of that wider update.
Investors will now decide whether the existing restrictions remain appropriate for a company of Revolut’s current value or whether Storonsky’s permitted borrowing capacity should increase alongside the economic value of his holding.
The vote will help define the governance framework around one of Europe’s largest founder-led private technology businesses as Revolut continues to expand and considers an eventual transition to public markets.
You must be logged in to post a comment.