Eco Wave Power's AGM: A Crossroads for Governance and Shareholder Value

The upcoming Annual General Meeting (AGM) of Eco Wave Power Global AB (publ) on June 30, 2025, marks a pivotal moment for the renewable energy firm. Shareholders face critical decisions on proposals that could reshape the company's governance structure and dilute equity, raising urgent questions about control, fairness, and long-term value preservation. The stakes are high: the stakes are the very foundations of shareholder power and financial stability.

A Dual-Class Share Structure: Concentrating Power, Eroding Rights

The proposed amendment to the Articles of Association introduces a two-tier share class system (

). Series A shares will carry 10 votes per share, while ordinary shares hold 1 vote per share, with no dividend rights for Series A holders. This bifurcation risks entrenching managerial control while stripping minority shareholders of influence.

The math is stark: if both LTIP warrants (totaling ~14.5 million shares) are exercised, voting rights could swell to 75% concentration in Series A holders. Such asymmetry is a hallmark of governance structures that prioritize control over accountability—a red flag for institutional investors.

The LTIP Dilution Tsunami: Equity Erosion by Design

The Long-Term Incentive Programs (LTIPs) for executives Inna Braverman and David Leb are the most contentious items. Each LTIP grants up to 7.25 million warrants for Series A shares, with a combined dilution of 23.08% of total shares if fully exercised. Crucially, these warrants carry a subscription price of SEK 0.02, a fraction of the current share price ().

The implications are clear:
1. Shareholder Value Dilution: Existing investors face a structural reduction in ownership stakes and voting clout.
2. Executive Overhang: The warrants' 10-year exercise window (expiring 2035) creates uncertainty about future equity stakes.
3. Approval Thresholds: While LTIPs require 9/10 shareholder approval, the board's control over Series A voting rights could skew the outcome.

The Anti-Takeover Weapon: A Shield or a Sword?

The board seeks authority to issue shares to block hostile bids—a move that sounds defensive but masks deeper risks. While deterring predatory takeovers is rational, this power could also be used to discourage legitimate bids, stifling potential value realization for shareholders. The proposed mechanism, coupled with the dual-class structure, creates a governance framework that prioritizes managerial autonomy over shareholder returns.

The Vote That Matters Most: A Call to Resist Erosion

Shareholders must vote against Items 13–18, particularly the LTIPs and share class changes. The cost of complacency is clear:
- Voting Rights Concentration: Minority shareholders lose influence, enabling self-dealing.
- Dilution Without Accountability: Executives gain equity stakes at pennies on the dollar, with no guarantee of performance-linked vesting.
- Strategic Flexibility at What Cost?: The anti-takeover clause and share buyback authorizations may shield the board but deter capital market discipline.

Conclusion: A Fork in the Road for Eco Wave Power

The AGM is a referendum on whether Eco Wave Power will prioritize shareholder value or managerial control. The proposed changes risk transforming the company into a governance outlier in the renewables sector. Investors should demand transparency, proportionality in dilution terms, and equitable voting structures. To safeguard their stakes, shareholders must reject the current proposals and insist on reforms that align executive incentives with long-term value creation—not just managerial power.

Moreover, historical data reveals that buying the stock the day before the AGM and holding for 30 days has delivered an average return of 7.69%, though with notable volatility, including a maximum drawdown of -11.17%. The relatively low Sharpe ratio of 0.19 underscores that returns may not be well-compensated for risk. This underscores the importance of balancing potential gains against risks when casting votes.

The clock is ticking. The vote on June 30 will decide whether Eco Wave Power becomes a model of shareholder-friendly governance—or a cautionary tale of value erosion.

Action Required: Vote AGAINST Items 13–18 at the AGM. Protect your equity, your voice, and your future in Eco Wave Power.