TORONTO (AP) -- Magna International Inc. said Friday more than 75 percent of its common shareholders approved a plan to pay founder and chairman Frank Stronach about $1 billion to give up his family's voting control of the global auto parts maker.
The plan would eliminate Magna's dual-class share structure and see Stronach give up his controlling class B multiple voting shares.
In exchange, Stronach and his family will receive $300 million in cash, nine million common A shares of Magna and control over a joint venture that will develop components for electric vehicles. Stronach will also receive an estimated $120 million in consulting fees, which will be gradually phased out by 2014.
The Stronach Trust, consisting of Stronach and his family, would continue to own a minority stake in the company through the A shares it receives.
Approval is also required from the Ontario Superior Court, which has set hearings for Aug. 12-13.
Magna said in a statement Friday that some shareholders have already told the court of their intention appear before the court "to present evidence and make arguments against the proposed transaction."
Stronach, along with his family, have controlled the company through a special class of shares that gives them majority voting rights without a majority equity stake. Each of the family's 750,000 class B shares has 300 votes, giving the family a 66 percent voting interest.
Magna co-CEO Don Walker said in May that the proposal to eliminate the Stronach family's voting control is meant to address shareholders' frustrations with what they view as an unreasonably low share price.
Walker has said that the dual-class structure at Magna had been a concern within the investment community for several years.
He said some U.S. investment firms have a practice of avoiding companies with dual-class voting structures, and this may have depressed the market value of all Magna shares, which trade on both the Toronto Stock Exchange and the New York Stock Exchange.
The plan had been opposed by several of Canada's biggest pension fund managers but there was little doubt that it would pass since they didn't have enough shares to block the transaction.
The Canada Pension Plan Investment Board, which owns about 1 percent, or one million shares of Magna, said while it is opposed to dual-class share structures involving different voting rights, it felt like the deal paid the founding Stronach family too much and would unfairly dilute shareholder value.
Neither Frank Stronach nor his daughter Belinda Stronach, a former Canadian federal politician, attended the meeting and Magna management declined to comment.
Magna's U.S. shares rose $1.03, or 1.4 percent, to $74.69 in afternoon trading in New York.