Tesla investors pave way for stock split, vote with company on most proposals

Tesla Inc. shareholders on Thursday approved a proposal expected to lead to a 3-for-1 stock split and sided with the company on most of the proposals up for a vote.

Tesla TSLA,
+0.40%
announced preliminary vote results at its gigafactory in Austin, its new corporate headquarters, at the end of an official shareholder meeting that was followed by a speech and question-and-answer session with Chief Executive Elon Musk.

The electric-car maker said the stock split, its second in two years, would provide its employees with more flexibility and make the stock more accessible to retail investors. Tesla performed a 5-for-1 stock split in August 2020, and its shares have increased 31% since then. They closed Thursday at $925.90, up 0.4%.

See: Tesla files for 3-for-1 stock split

With a goal of producing 20 million vehicles a year, Musk said an announcement about a new factory location could come later this year, and said Tesla could ultimately have 10 to 12 factories around the world. It currently has four, in Fremont, Calif.; Austin, Texas; Shanghai and Berlin.

Shareholders also approved the re-election of two board members despite being urged against it by proxy advisory firms Glass Lewis & Co. and Institutional Shareholder Services.

Martin Viecha, head of investor relations for Tesla, announced that the company proposals to reduce director terms to two years from three years, and to remove the supermajority voting requirement for proposals, had been approved by investors but failed to hit the two-thirds threshold of total shares outstanding needed to make the votes official. In addition, a shareholder proposal for shareholder proxy access passed, he said. It would give shareholders the ability to nominate board members.

See: Influential proxy advisory firms urge against voting for Tesla board members, for most shareholder proposals

Seven other shareholder proposals failed, according to the preliminary results. They included calls for reports on anti-harassment and discrimination efforts, and on mandatory arbitration. Shareholders also urged Tesla to adopt a policy on freedom of association and collective bargaining.

The company expects to file a final tally of the shareholder votes within four business days, as required, Viecha said.

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