DETROIT/NEW YORK--General Motors Co shareholders on Tuesday overwhelmingly rejected proposals by hedge fund Greenlight Capital to restructure the company's stock and reshape its board, backing Chief Executive Mary Barra's efforts to rev up the company's stalled share price.
Fending off the challenge from Greenlight founder David Einhorn does not mean the end of Barra's battles. GM shares traded on Tuesday at $34.25, 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.
The win also does not mean pressure will let up from Greenlight, which is the fifth largest shareholder, and while gracious in defeat, continued to make the case for fresh faces on the board. "We are disappointed that shareholders have elected to maintain the status quo," Einhorn said in a statement on Tuesday. "We congratulate GM’s management on their win today."
Greenlight's campaign came as U.S. auto industry sales of new vehicles have begun to wane after a boom cycle that has lasted since 2010. Silicon Valley electric vehicle maker Tesla Inc this year surpassed GM's market value, reflecting investor confidence that, despite heavy losses, Tesla has a better strategy as the auto industry shifts to ride services and electric, autonomous vehicles.
In comments before Tuesday's shareholder meeting, Barra acknowledged Greenlight's position on its stock price, saying "we do believe GM stock is undervalued," and said the company "is continually looking at ideas" to increase investor interest.
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 meeting.
GM's board nominees were elected with between 84 percent and 99 percent of the vote, the company said. The board will remain the same at 11 members, with Barra as chairman.
