Tesla seeks investor approval for a 3-for-1 stock split

A Tesla logo appears in Taipei, Taiwan, August 11, 2017. REUTERS/Tyron Seo

June 10 (Reuters) – Electric car maker Tesla Inc. (TSLA.O) On Friday, it proposed a three-to-one stock split, making its shares more affordable after the most valuable automaker’s recent sell-off.

The company also said Oracle Corp co-founder Larry Ellison and friend of Tesla CEO Elon Musk will not run for re-election to Tesla’s board when his term expires at this year’s shareholder meeting.

Ellison is among the major investors who have promised to finance Musk’s $44 billion acquisition of social media company Twitter Inc.

Shares of Tesla, based in Austin, Texas, rose more than 1% in extended trading on Friday. It has fallen nearly 40% since Musk unveiled his stake to Twitter in early April, partially affected by a strict shutdown in Shanghai that affected Tesla production.

Shareholders will vote on a proposed Tesla stock split on August 4. If approved, it will be the company’s first such action after the five-for-one split in August 2020. Read more

Tesla said the split would enable its employees to “have more flexibility in managing equity” and make its stock “accessible to our individual shareholders.”

Alphabet Corporation (GOOGL.O)Apple company (AAPL.O)and Amazon.com Inc(AMZN.O)They also recently split their stock.

While a split has no effect on the company’s fundamentals, it can boost the stock price by making it easier for a larger group of investors to own the stock.

Tesla will also require shareholders to vote on reducing the term of its board of directors to two years from three. If approved, the terms will be arranged over a period of two years.

union

Meanwhile, Tesla shareholders’ proposals include provisions 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.

“In 2021, the National Labor Relations Board upheld a 2019 ruling that Tesla illegally fired a worker involved in union organizing, and that the CEO had illegally threatened workers in connection with unions,” according to a shareholder proposal cited in the Tesla filing.

In March, Musk called the United Auto Workers (UAW) union to hold a vote at the Tesla California plant. But the proposal said that “Tesla does not have any formal political obligations to respect the right to freedom of association, nor has it made clear how it would effectively implement such an obligation.”

Tesla’s board advised a vote against the proposal, saying that Tesla recently raised the base salary of its manufacturing jobs and is “actively involved” in protecting employee rights.

The contributors also proposed an annual report on Tesla’s efforts to prevent sexual harassment and racial discrimination after it was hit by a series of lawsuits.

The California Civil Rights Agency has filed a lawsuit accusing Tesla of failing for years to address rampant racist behavior at its Fremont assembly plant.

Tesla said it “does not tolerate discrimination, harassment, retaliation, or any other mistreatment of employees in the workplace.”

Another resolution asked Tesla to assess “the impact of Tesla’s current use of arbitration on the prevalence of harassment and discrimination in the workplace.”

The shareholders also called on the company to report on its policies to address the perceived lack of gender and ethnic diversity on its board of directors.

Additional reporting by Akash Sriram in Bengaluru and Hyungu Jin in San Francisco; Editing by Shinjini Ganguly, Matthew Lewis and Richard Chang

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