Electric vehicle maker Tesla proposed a three-to-one stock split on Friday, making its shares more affordable after the most valuable automaker’s recent selloff.
The company also said Oracle Corp. Co-Founder Larry Ellison, Friend of Tesla’s CEO Elon Muskwill not stand for re-election for Tesla’s Board when his term ends at this year’s shareholder meeting.
Ellison is among the top investors who have pledged funding for Musk’s $44 billion (about Rs 3,44,168 crore) acquisition of the social media firm. Twitter,
Shares of Austin, Texas-based Tesla rose more than 1 percent in extended trading Friday. They have fallen nearly 40 percent since Musk unveiled his stake in Twitter in early April, partially hurt by a strict lockdown in Shanghai that has hit Tesla’s production.
Shareholders will vote on Tesla’s proposed stock split on August 4. If approved, it will be the company’s first such action since the five-for-one split in August 2020.
Tesla said the split will enable its employees “greater flexibility in managing their equity” and making their stock “more accessible to our retail shareholders.”
Alphabet, Apple And Amazon.Com has also recently divided its shares.
While a split does not affect the fundamentals of the company, it can drive up the share price, making it easier for a wide range of investors to own the stock.
Tesla will also ask shareholders to vote on reducing the terms of its board of directors from three to two years. If approved, the terms will exceed two years.
Meanwhile, Tesla’s shareholders’ proposals include items related to corporate governance such as the right of employees to form a union and Tesla’s efforts to prevent sexual harassment and racial discrimination.
According to a stockholder proposal cited in Tesla’s filing, “In 2021, the National Labor Relations Board upheld a 2019 ruling that Tesla unlawfully fired a worker involved in a union event, and the CEO illegally The workers were threatened.”
In March, Musk invited the labor union United Auto Workers (UAW) to vote at Tesla’s California factory. But “Tesla has no formal policy commitment to respect the right to freedom of association, nor has it demonstrated how it would effectively conduct such commitment,” the resolution said.
Tesla’s board advised to vote against the proposal, saying Tesla recently increased base pay for its manufacturing jobs and is “actively engaged” in protecting workers’ rights.
Shareholders also proposed an annual report on Tesla’s efforts to prevent sexual harassment and racial discrimination after being hit by multiple lawsuits.
A California civil rights agency filed a lawsuit accusing Tesla of failing to address widespread racist conduct at its Fremont assembly plant.
Tesla said it “does not tolerate discrimination, harassment, retaliation or any abuse of employees in the workplace.”
Another proposal asked Tesla to evaluate “the impact of Tesla’s current use of arbitration on the spread of harassment and discrimination in its workplace.”
Shareholders also called on the company to report its policies to address the perceived lack of gender and racial diversity on its board.
© Thomson Reuters 2022