The Tesla logo is seen in Taipei, Taiwan on August 11, 2017. REUTERS / Tyrone Siu
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June 10 (Reuters) – Electric vehicle maker Tesla Inc (TSLA.O) on Friday proposed a three-to-one share breakdown, making its shares more affordable following the carmaker’s recent sales more valuable.
The company also said that Oracle Corp. co-founder Larry Ellison, a friend of Tesla CEO Elon Musk, will not run for re-election to Tesla’s board when his term ends at the Tesla shareholders’ meeting. year.
Ellison is among the top investors who have pledged $ 44 billion in financing for Musk’s acquisition of social media firm Twitter Inc.
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Shares of Tesla, based in Austin, Texas, rose more than 1% in extended trading on Friday. They have fallen nearly 40% since Musk announced his stake on Twitter in early April, affected in part by a strict blockade in Shanghai that has affected Tesla production.
Shareholders will vote on Tesla’s proposed share allotment on August 4th. If approved, it would be the company’s first such action after a five-for-one division in August 2020. read more
Tesla said the division would allow its employees to “have more flexibility in managing their assets” and make their shares “more accessible to our retail shareholders.”
Alphabet Inc. (GOOGL.O), Apple Inc. (AAPL.O) and Amazon.com Inc. (AMZN.O) have also recently split their shares.
While a division has no bearing on the fundamentals of a company, it could increase the share price by making it easier for a wider range of investors to own the shares.
Tesla will also ask shareholders to vote to reduce the term of its board of directors from three to two years. If approved, the deadlines would be spread over two years.
UNION
Meanwhile, Tesla’s shareholder proposals include issues 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 had illegally fired a worker involved in the union organization and that the CEO had illegally threatened workers with respect to unionization.” according to a shareholder proposal cited in the Tesla presentation.
In March, Musk invited the United Auto Workers (UAW) to hold a vote at the Tesla plant in California. But “Tesla has no formal political commitment to respect the right to freedom of association, nor has it demonstrated how that commitment would effectively operate,” the proposal said.
The Tesla board advised a vote against the proposal, saying Tesla recently increased the base salary for its manufacturing work and is “actively committed” to protecting employee rights.
Shareholders also proposed an annual report on Tesla’s efforts to prevent sexual harassment and racial discrimination after being hit by a series of lawsuits.
A California civil rights agency has filed a lawsuit accusing Tesla of failing to address widespread racist behavior at its Fremont assembly plant for years.
Tesla said it does not “tolerate discrimination, harassment, retaliation or any mistreatment of employees in the workplace.”
Another resolution called on Tesla to assess “the impact of Tesla’s current use of arbitration on the prevalence of harassment and discrimination in its workplace.”
Shareholders also asked the company to report on its policies to address the perceived lack of gender and racial diversity on its board.
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Report by Akash Sriram in Bangalore and Hyunjoo Jin in San Francisco; Editing by Shinjini Ganguli, Matthew Lewis and Richard Chang
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