General Motors shareholders reject stock split

General Motors (GM) investors rejected activist investor David Einhorn's proxy campaign to split the automaker's shares into two classes by an overwhelming margin Tuesday, ending a boardroom skirmish that left many stockholders scratching their heads.

"We made a decision to bring a creative idea to GM's shareholders and nominate directors to help fix GM's inefficient capital structure and unlock significant value for all shareholders". GM shares traded on Tuesday at $34.25 a share, about 16 percent lower than when Barra became CEO, despite robust profits and a series of moves to sell or shut down money losing operations.

"We're are aggressively returning capital to shareholders, we're deploying resources in higher return opportunities, we're delivering great new cars, trucks and crossovers.and we're working to lead the transformation of personal mobility", she said.

The company also says two independent evaluation firms have analyzed Einhorn's plan and recommended against it.

Greenlight's campaign came as USA auto industry sales of new vehicles have begun to wane after a boom cycle that has lasted since 2010. GM employs more than 8,000 people in Tarrant County at its Arlington assembly plant that builds sport utility vehicles and its GM Financial subsidiary.

But Einhorn's pitch to rework GM's capital structure flopped with debt rating agencies, which said Einhorn's plan could hurt the vehicle maker's credit rating, and he failed to rally other shareholders to his cause.

In a statement, Einhorn said Greenlight was disappointed that shareholders chose to maintain the status quo.

But 91 percent of shareholders voted against the proposal; 96 percent if Greenlight's own votes were discounted.

Barra said 2016 was a very good year for GM, despite the decision to exit the European market with the sale of Opel to PSA, and to re-organize its worldwide operations by dropping out of the market in India. Greenlight controls about 3.6 percent of GM shares, and is now the fifth-largest public shareholder, the fund said in regulatory filings.

Shareholder John Love, who supported the proposal, criticized the company for shifting some production to Mexico, closing factories in Flint, Michigan, and for importing a Buick SUV from a factory in China.

  • Zachary Reyes