David Einhorn gets smacked down at GM's annual meeting

David Einhorn gets smacked down at GM's annual meeting

General Motors shareholders have overwhelmingly turned down an activist shareholder's plan to split the company's stock into two classes.

Preliminary results showed more than 91 percent of shareholders voted against Greenlight's proposal to have GM offer dividend and capital appreciation shares, according to GM officials at the automaker's annual shareholders' meeting.GM's nominees were elected with between 84 percent and 99 percent of the vote, the company said. Shareholders also voted on a slate of directors, re-electing all 11 board members and nixing all three nominees put forward by Greenlight.

- Greenlight proposed splitting the stock into one class of shares that would be entitled to the company's $1.52 dividend in perpetuity and another class that would be entitled to any profit generated by growth. "We believe GM stock is undervalued", she said, adding that the company is focused on "action to maximise returns and enhance long-term value for our shareholders".

"We regularly continue to evaluate many different ideas to unlock that value, but also recognizing some of the connectivity" between areas such as self-driving cars and GM's electric-vehicle program, she said.

Barra's stance has found support from two proxy advisory-service companies in May, when Institutional Shareholder Services and Glass Lewis and both recommended voting against Greenlight's proposal.

Greenlight's ambitious plan, which Einhorn said could boost GM's $52 billion market capitalization by as much as $32 billion, faced an uphill climb even before the vote. Warren Buffett's Berkshire Hathaway, which holds a 3.3% stake in GM, remained silent on the proposal.

Shares of GM were little changed at $34.43 on Tuesday.

GM has adamantly opposed the proposal since it became public in March.

"After careful consideration, we determined that Greenlight's proposal is not in the best interest of our shareholders", GM CEO and Chairman Mary Barra told media prior to the annual meeting starting.

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.

Barra also confirms GM's plan to push forward with fuel-efficiency and carbon-dioxide emissions despite President Donald Trump's decision to exit the Paris climate accord.

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