General Motors

General Motors shareholders on Tuesday overwhelmingly rejected a stock-split proposal by an activist investor group that has faulted the company for its “inefficient” capital structure.

A preliminary vote count at GM’s annual meeting showed more than 91% of shareholder votes were cast against Greenlight Capital’s plan, giving the company’s management a vote of confidence as it seeks to boost profitability as electric, autonomous vehicles and ride-hailing apps roil the industry.

Shareholders also elected all of GM’s 11 board nominees, rejecting Greenlight’s alternative slate of three nominees.

“On behalf of our board and management, we appreciate the significant support of our shareholders as we continue to transform GM and increase the value of their investment,” CEO Mary T. Barra said in a news release.

“We value the perspectives of our shareholders and will continue to actively engage with them — and relevant external experts — as we enhance our core business, deploy capital to higher-return opportunities, and advance our leadership in the future of personal mobility,” she added.

Greenlight, which is headed by billionaire president David Einhorn, proposed creating tens of billions of dollars by splitting GM shares into two classes, with one class receiving dividends and the other participating in growth and earnings.

“We decided to bring a creative idea to GM’s shareholders and nominate directors to help fix GM’s inefficient capital structure and unlock significant value for all shareholders,” Einhorn said after the shareholder vote. “We are disappointed that shareholders have elected to maintain the status quo.”

As The Detroit News reports, the automaker’s stock “has moved up only slightly in the six years since its initial public offering, despite record earnings. The S&P 500 index has more than doubled during that period.”

In an interview with Bloomberg Television, Einhorn called GM’s balance sheet “fundamentally too conservative for the value that’s created in the operations to be unlocked,” citing a $50 billion market capitalization and GM’s $20 billion of cash, plus available credit.

But two proxy advisory-service companies — Institutional Shareholder Services and Glass Lewis — both recommended voting against Greenlight’s proposal.

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