Chapter 3

Control and Alignment

eToro presents as a founder-controlled, dual-class company, but the control is more diffuse — and more aligned with outside shareholders — than the structure suggests. A regulatory 9.99% cap means no single holder, not even co-founder and CEO Yoni Assia, can vote more than that; the super-voting Class B bloc has shrunk from 88.9% of the vote at listing to roughly 67% as departing holders' shares auto-converted; and insider pay is modest cash against a large, deep-in-the-money equity stake. The offsets are a combined chair/CEO, a staggered board, and foreign-private-issuer disclosure gaps.

Who owns eToro

As of February 20, 2026, eToro had 66,806,751 Class A shares (one vote each) and 13,739,582 Class B shares (ten votes each) outstanding [1]. Directors and officers as a group hold about 22% of the economics but 35% of the vote — meaningful influence, well short of majority control. No individual, including Yoni Assia, votes more than 9.99% [2].

Source: FY2025 Annual Report (Form 20-F), Item 7.A Major Shareholders, beneficial-ownership table as of Feb 20, 2026 [3].

The table shows two distinct stories. Yoni Assia holds roughly 8.6% of the shares but, on paper, ten-vote Class B stock that would carry far more than 9.99% of the vote; the cap holds him to 9.99% [4]. Santo Politi's Spark Capital position is the mirror image — about 8.9% of the economics but only 3.5% of the vote, because it is all single-vote Class A. Founder economic ownership is real but not dominant: the two Assia brothers together hold roughly 11.5% of the shares.

The 9.99% cap and a dual-class that is thinning

Two mechanics separate eToro from a conventional founder-locked dual-class listing. The first is regulatory. Because eToro is a licensed financial-services group, its charter deems any shares above 9.99% of combined voting power "Excess Shares" that carry no vote and no right to distributions unless a regulator approves the larger holding [5]. That is why both Yoni Assia and BRM Group appear at exactly 9.99% rather than higher. The concentration a ten-to-one vote ratio would normally produce is capped by design.

The second is conversion. Class B shares automatically convert one-for-one into Class A on almost any transfer, and the whole class sunsets — converting to Class A — no later than May 13, 2035, or earlier if the Class B pool falls below 15% of its IPO-date size [6]. That conversion is already visible. At the May 2025 IPO, Class B represented about 88.9% of the vote [7] and comprised 36.5 million shares [8]. Nine months later the Class B count had fallen to 13.7 million and its share of the vote to roughly 67% [9]. As pre-IPO holders sold, their super-voting stock converted to ordinary shares.

Sources: derived from the Feb 2026 beneficial-ownership table (share counts and combined-vote percentages) [10].

Sources: IPO Prospectus (Form 424B4), The Offering — 88.9% at listing [11]; FY2025 Form 20-F, Item 7.A — share counts as of Feb 20, 2026 [12].

The same drift shows in the insider bloc: directors, officers and principal shareholders held about 52% of the vote at the IPO and roughly 35% by February 2026 [13]. For a professional investor the practical read is that founder control here is a board-and-influence story, not a hard voting lock, and the lock loosens further each year the Class B pool converts. The counter-consideration is that even a diluted super-vote plus a combined chair/CEO leaves outside holders with limited ability to force change, and the multi-class structure makes eToro ineligible for the main U.S. large-cap composite indices, foreclosing a slice of passive demand [14].

The board and its offsets

Five of seven directors qualify as independent under Nasdaq rules, but Yoni Assia serves as both chairman and CEO, and the board is staggered into three classes with three-year terms — an entrenchment feature that slows any change of control [15]. With the roles combined, the independent directors have named Avner Stepak as Lead Independent Director; as a foreign private issuer, eToro follows British Virgin Islands home-country practice and is not required to maintain a majority-independent board at all [16]. The independent slate does carry relevant weight — it includes Laura Unger, a former SEC Commissioner and acting chair [17].

The related-party footnotes are small in dollars but worth noting for a founder-led company. eToro has repeatedly waived its right of first refusal on employee share transfers to iAngels, a firm whose CEO and owner is Yoni Assia's spouse and whose board includes his father [18]. Director Lior Shemesh is CFO of Wix.com, to which eToro paid about $23,000 for website services and a further $64,000 to Wix-owned Base44 during 2025 [19]. None is financially material; together they sketch a closely-networked founder ecosystem rather than a governance red flag.

Pay: modest cash, large embedded equity

Total compensation for all directors and named executive officers in 2025 was $7.5 million — a low figure against roughly $216 million of net income, and one eToro is not required to break down by individual because foreign private issuers are exempt from the detailed and per-officer pay disclosure a domestic filer's proxy would carry [20]. The alignment sits almost entirely in equity, not cash.

Source: FY2025 Form 20-F, Item 6.B Compensation — aggregate pay and 3,618,488 Class A + 3,831,622 Class B options held by directors and executives at a $6.18 weighted-average strike [21]; intrinsic value derived at a recent ~$35.67 share price.

Directors and executives hold about 7.45 million options struck at a weighted-average $6.18 [22]. At a recent price near $35.67 that is roughly $220 million of embedded gain — about thirty times the annual cash-and-equity pay figure. Insider wealth is therefore tied to the share price, not to salary, which is the alignment a professional investor generally wants to see. The strike also reveals the vintage: these are legacy grants from before the IPO, and management is not repricing itself richer — the 2025 grants came in at about $15 per share [23].

Against that alignment sits dilution. Company-wide, 13,915,798 options were outstanding at year-end 2025 at a $9.18 weighted-average strike, of which 12,317,036 were already exercisable [24]. That is an overhang of roughly 17% on the ~80.5 million shares outstanding. It is not a hidden cost: the gap between eToro's ~80.5 million basic shares and the ~95 million diluted shares behind the $2.27 diluted EPS in the financials is largely this option pool, so the multiple a buyer pays already reflects it.

What would change the read

The alignment case rests on insiders owning share-price-linked equity and taking little cash; it would weaken if future grants reset strikes materially higher, if the aggregate pay figure climbs without a matching move in results, or if the related-party web around the founder grows beyond the immaterial sums disclosed today. The control case cuts the other way: the 9.99% cap and the melting Class B pool steadily reduce insider voting power, but a combined chair/CEO on a staggered board means a professional investor should not expect to force strategic change, and index exclusion will keep a segment of passive capital on the sidelines until the dual-class structure sunsets.