The Tesla logo is visible in Taipei, Taiwan, 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 split, making its shares more affordable following recent sales by the carmaker’s most valuable carmaker.
The company also said Oracle Corp. co-founder Larry Ellison, a friend of Tesla CEO Elon Musk, would not run for re-election on Tesla’s board when his term expires at this year’s shareholders’ meeting.
Ellison is among the best investors who have promised funding for Musk’s $ 44 billion acquisition of social media company Twitter Inc.
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Shares of Austin, Texas-based Tesla rose more than 1 percent in continued trading on Friday. They have fallen nearly 40 percent since Musk revealed his stake in Twitter in early April, hurt in part by a severe blockade in Shanghai that affected Tesla’s production.
Shareholders will vote on the proposed division of Tesla shares on August 4. If approved, this will be the company’s first such action since a five-to-one split in August 2020. Read more
Tesla said the split would allow its employees to “have more flexibility in managing their own capital” and make their shares “more accessible to our retail shareholders.”
Alphabet Inc (GOOGL.O), Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O) also recently split their shares.
While the split has nothing to do with the company’s fundamentals, it could boost the price of shares by making it easier for a wider range of investors to own the shares.
Tesla will also ask shareholders to vote to reduce the board’s term of office from three years to two years. If approved, the deadlines will be spread over two years.
UNION
Meanwhile, Tesla’s shareholders’ proposals include elements 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 Council reaffirmed the 2019 decision that Tesla had illegally fired a union member and that the CEO had illegally threatened workers with unionism,” according to a shareholder proposal. of Tesla.
In March, Musk invited the United Auto Workers (UAW) to vote at Tesla’s California plant. But “Tesla has no formal political commitment to respect the right to freedom of association, nor has it demonstrated how effectively it would implement such a commitment,” the proposal said.
The Tesla board recommended voting against the proposal, saying Tesla had recently increased the basic salary for its production jobs and was “actively involved” in protecting employees’ rights.
Shareholders also proposed an annual report on Tesla’s efforts to prevent sexual harassment and racial discrimination after being affected by a series of lawsuits.
The California Civil Rights Agency has filed a lawsuit accusing Tesla of failing to deal with widespread racist behavior at its Fremont assembly plant for years.
Tesla said it did not “tolerate discrimination, harassment, retaliation or any kind of harassment of employees in the workplace.”
Another resolution asked Tesla to assess “the impact of Tesla’s current use of arbitration on the spread of harassment and discrimination in the workplace.”
Shareholders also called on the company to report on its policies to address the perceived lack of gender and racial diversity on board.
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Report by Akash Sriram in Bengaluru and Hyunjoo Jin in San Francisco; Edited by Shinjini Ganguli, Matthew Lewis and Richard Chang
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