Tesla will apply for investor approval for a 3-for-1 share split

The Tesla logo was seen in Taipei, Taiwan on August 11, 2017. REUTERS / Tyrone Siu

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June 10 (Reuters) – Electric car maker Tesla Inc (TSLA.O) proposed a three-to-one share split on Friday, making the shares more affordable following the recent sale of the most valuable carmaker.

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

Ellison is among the top 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% in expanded trading on Friday. They have fallen almost 40% since Musk unveiled his stake in Twitter in early April, partly damaged by a strict blockade in Shanghai that has affected Tesla’s production.

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

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

Alphabet Inc (GOOGL.O), Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O) have also recently shared their shares.

Although a split has no bearing on a company’s fundamentals, it can strengthen 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 board’s election period to two years from three. If they are approved, the terms will be shifted over two years.


Meanwhile, proposals from Tesla shareholders include corporate governance-related elements such as employees’ right to form a trade 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 trade union organization, and that the CEO had illegally threatened workers regarding trade unionism,” according to a shareholder proposal quoted in Tesla’s submission.

In March, Musk invited the United Auto Workers (UAW) union to hold a poll at Tesla’s California plant. But “Tesla has no formal political obligation to respect the right to freedom of association, nor has it demonstrated how it will effectively operationalize such an obligation,” the proposal said.

Tesla’s board recommended voting against the proposal, saying that Tesla recently increased the base salary for its production jobs and that they are “actively engaged” in protecting employees’ rights.

Shareholders 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.

A California civil rights agency has filed a lawsuit accusing Tesla of failing to address widespread racist behavior at its Fremont assembly line for years.

Tesla said they do not “tolerate discrimination, harassment, retaliation or abuse of employees in the workplace.”

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

The shareholders also encouraged the company to report its guidelines for addressing perceived shortages of gender and racial diversity on the board.

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Reporting of Akash Sriram in Bengaluru and Hyunjoo Jin in San Francisco; Edited by Shinjini Ganguli, Matthew Lewis and Richard Chang

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