Tesla’s proposed three-for-one stock split was the central focus for investors at the automaker’s annual general meeting in Austin on Thursday.
Tesla CEO Elon Musk’s rewarding of long-term loyal shareholders was not something new. In March, the company announced its plan to seek investor approval to increase its number of authorized shares. This was just two years after the company issued a five-for-one split.
Other proposals at the meeting addressed corporate governance-related items such as endorsing the right of employees to form a union and asking the company to report its efforts to prevent racial and sexual discrimination annually.
“We have more than 100,000 employees worldwide, and we comply with all applicable local laws related to freedom of association and collective bargaining,” read an opposing statement from Tesla’s board of directors. He also said they “respect internationally recognized human rights in all the areas we operate.”
Tesla shares debuted in 2010 at $17 per share. Within 10 years, Tesla’s share price had skyrocketed to more than $1,200, raising its market capitalization to more than $1 trillion.
On the date of Tesla’s shareholder meeting, company shares opened at $908.01 and sold roughly 5% over the trading day.
While a split does not affect a company’s fundamentals, a lower share price can make it more accessible and affordable for investors to buy in. Recent companies that have announced some form of a stock split include Alphabet, Amazon, and, more recently, GameStop, which completed a 4-for-1 stock split in the form of a 3-for-1 stock dividend.
After selling off millions of shares, Musk now owns roughly 15.6% of the company, according to data from Refinitiv.
A vote to re-elect Ira Ehrenpreis and Kathleen Wilson-Thompson was also on Thursday’s agenda. Tesla shareholders were recommended to vote against the two nominees — both members of the Nominating and Corporate Governance Committee — by the proxy advisory firm Institutional Shareholder Services.