DETROIT — General Motors shareholders overwhelmingly rejected a proposal to divide company shares into two distinct classes with different objectives, the company announced Tuesday.
The vote at the auto giant’s annual meeting came after GM CEO Mary Barra said the proposal from hedge fund investor David Einhorn of Greenlight Capital was not in the stockholders’ best interest.
Einhorn had argued the company should boost its stock price and his proposal called for creating two classes of common stock, with one focused on dividends and the other on capital appreciation. But 91% of shareholders voted against the proposal; 96% if Greenlight’s own votes were discounted.
Shareholders also reelected all 11 members of the company’s board of directors, each receiving between 84% and 99% of the vote.
Despite opposing the Greenlight proposal, Barra said she was not satisfied with the company’s underperforming stock. But she said GM’s board had spent several months evaluating the proposal but ultimately decided it was too risky.
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 international operations by dropping out of the market in India. (GM, the biggest U.S. automaker, saw its sales fall 1.3% last month compared to the same month of 2016.)
“We continue to gain momentum in 2017 driven by strong performance in the U.S. and continued growth in China. We believe GM stock is undervalued,” she said, adding that the company is focused on “action to maximize returns and enhance long-term value for our shareholders. … We value the perspectives of our shareholders and will continue to actively engage with them.”
Barra also said GM is committed to electric and autonomous vehicles as “a very important investment in the future and a very necessary part of our portfolio.”
In response to a question from reporters about the Trump administration’s decision to drop out of the Paris climate accord, Barra said GM remains sensitive to environmental concerns and continues to take steps to reduce vehicle emissions and use renewable energy to power its factories.
“We understand the science and believe in the science. ...We are going to continue to be responsible,” Barra said during a press conference prior to the shareholders meeting. "We’ve communicated that to the administration.”
By Joseph Szczesny
Copyright Agence France-Presse, 2017