Tesla has just submitted its annual declaration of proxy to the SEC and revealed that it plans to split shares three to one, and this board member Larry Ellison has no plans to run for re-election.
Shares of Tesla rose more than 1% after business hours after closing at $ 696.69 on Friday.
The company said in a statement about the proposed share split: “Our success depends on attracting and retaining excellent talent” and that “highly competitive compensation packages” offering each employee the option to raise equity helped Tesla do so. “We believe that the division of shares will help to zero the market price of our ordinary shares so that our employees have more flexibility in managing their own capital.”
The division of shares is cosmetic and may mean that smaller investors think they can afford the shares, but these investors are minimal compared to large institutions. Many brokerage companies already offer investors partial trading, which allows small investors to buy a piece of seemingly expensive shares.
Elon Musk, during an event at SpaceX headquarters in Hawthorne, California, USA, on Thursday, October 10, 2019.
Bloomberg / Getty
In its power of attorney for 2022, the electric vehicle and renewable energy business also revealed that board member Larry Ellison currently owns 1.5% of Tesla. Ellison plans to step down as a member of Tesla’s board of directors, but the documentation does not say who can replace him.
The documentation also says that Tesla CEO Elon Musk currently holds 23.5% of Tesla’s shares, and Vanguard owns 6% of Tesla’s shares. Musk has sold a significant portion of his holdings to Tesla in late 2021, in part to secure a stake in Twitter, the social media giant, which has agreed to acquire about $ 44 billion.
Tesla announced a similar five-to-one share split in August 2020.
In thirteen different proposals offered by shareholders, Tesla was asked to research and reveal more about its own: anti-harassment and discrimination efforts, lobbying practices, supply and labor chains, and details of its own water use and water-related impacts; climate risks.
The company plans to hold its annual shareholders’ meeting online and with a limited number of shareholders invited to attend the new Tesla plant in Austin, Texas on August 4, 2022.
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