Tesla seeks investor approval for second stock split at annual meeting


Tesla will hold its annual general meeting Thursday, at which the world’s most valuable automaker’s proposal for a second stock split in as many years will be at the center of investors gathered in Austin, Texas. Also listed are shareholder proposals on corporate governance-related topics, including endorsing employees’ right to form a union and asking the company to report annually on its efforts to combat racial discrimination and sexual harassment. to prevent.

The meeting comes as Tesla chief Elon Musk and Twitter are battling it out in a legal battle after the world’s richest person said last month that he had a $44 billion (approximately Rs. 3,48,300 crore) takeover bid for the company. gave up.

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Musk owns 15.6 percent of Tesla, according to Refinitiv data, after selling millions of shares in the past year.

Tesla first announced its plan to seek investor approval to increase its number of shares in March, two years after a five-to-one split put the price of the high-flying stock within the reach of common investors. Tesla is now proposing a three-to-one distribution.

Tesla shares, which debuted in 2010 at $17 (about Rs. 1,300) each, soared to over $1,200 (about Rs. 95,000) late last year after the 2020 stock split, pushing the company’s market cap above $1. trillion (about Rs. 79). .16,233 crore).

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While a split doesn’t affect a company’s fundamentals, it can drive the stock price up by making it easier for a larger number of investors to own the stock.

Tech heavyweights Alphabet, Amazon and Apple have also announced stock splits in the recent past.

Tesla shareholders will also vote on the board’s proposals to shorten its directors’ terms from three to two years and to re-elect Ira Ehrenpreis and Kathleen Wilson-Thompson.

Proxy advisory firm Institutional Shareholder Services (ISS) last month advised Tesla investors to vote against the two nominees.

The meeting will vote on a shareholder proposal asking the board of directors to allow large and long-standing shareholders or groups with at least 3 percent of the company’s stock to place competing director candidates on the company.

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Tesla said in its proxy filing that this could create an opportunity for special interests that only seek short-term returns rather than having the company’s long-term interests in mind.

In a board proposal, the company asked shareholders to approve the removal of some supermajority voting requirements, saying it would give its “shareholders a bigger vote.”

Proxy consultancies Glass Lewis and ISS advised shareholders to vote for both proposals.

The annual meeting begins at 5:30 p.m. ET (3 p.m. IST on Friday).

© Thomson Reuters 2022



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