Electric vehicle maker Tesla Inc proposed a three-fold stock split on Friday, making its shares more affordable following recent sales by the most valuable automaker.
The company also said Oracle Corp co-founder Larry Ellison, a friend of Tesla CEO Elon Musk, will not stand for re-election to Tesla’s board of directors when his term ends during the election. shareholders’ meeting this year.
Ellison is among the top investors who have pledged 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% in extended trading on Friday. They have fallen nearly 40% since Musk disclosed his Twitter stake in early April, hurt in part by a strict lockdown in Shanghai that has affected Tesla production.
Shareholders will vote on Tesla’s proposed stock split on August 4. If approved, it would be the company’s first such action following a five-to-one split in August 2020.
Tesla said the split would allow its employees “to have more flexibility in managing their equity” and make its stock “more accessible to our retail shareholders.”
Alphabet Inc, Apple Inc and Amazon.com Inc also recently split their shares.
While a split won’t affect a company’s fundamentals, it could support the stock price by making it easier for a wider range of investors to own the stock.
Tesla will also ask shareholders to vote to reduce the term of its board of directors to two years from three. If approved, terms would be staggered over two years.
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Meanwhile, Tesla’s shareholder 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 Board upheld a 2019 ruling that Tesla unlawfully terminated a worker involved in union organizing and that the CEO unlawfully threatened workers regarding unionization,” according to a quoted shareholder proposal. in Tesla’s file.
In March, Musk invited the United Auto Workers (UAW) union to hold a vote at Tesla’s California factory. But “Tesla has no formal policy commitment to respect the right to freedom of association, nor has it demonstrated how it would effectively operationalize such a commitment,” the proposal says.
Tesla’s board of directors advised voting against the proposal, saying Tesla had recently increased base pay for its manufacturing jobs and was “actively engaged” in protecting employee rights.
Shareholders also proposed an annual report on Tesla’s efforts to prevent sexual harassment and racial discrimination after being hit with a series of lawsuits.
A California civil rights agency has filed a lawsuit accusing Tesla of failing for years to address widespread racist behavior at its Fremont assembly plant.
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Tesla said it does “not tolerate discrimination, harassment, retaliation, or any 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 its workplace.”
Shareholders also called on the company to flag its policies to address the perceived lack of gender and racial diversity on its board.
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