By Rebecca Elliott
Tesla Inc. investors on Thursday are expected to clear the way for the company to complete its second stock split in about two years.
Elon Musk's electric-vehicle maker, whose stock price has roughly tripled in the past two years, is planning a 3-for-1 stock split that the company has said is designed to make ownership more accessible to employees and individual investors. Tesla needs shareholders to sign off on issuing the new shares to complete the split. The move wouldn't affect the company's market value, which topped $960 billion as of Wednesday.
That proposal is among more than a dozen facing investor consideration at Tesla's annual shareholder meeting, scheduled to be held at the company's Austin, Texas-area factory at 4:30 p.m. local time.
The gathering follows a recent rally in Tesla's stock price after the company reported second-quarter earnings that were better than expected. Tesla generated $2.3 billion in profit for the period, ahead of Wall Street's expectations but below its record quarterly profit of $3.3 billion in the first three months of the year.
An extended shutdown at Tesla's Shanghai assembly plant, paired with global supply-chain disruptions and labor shortages weighed on results.
Chief Financial Officer Zach Kirkhorn said on the company's July earnings call that Tesla was still aiming for 50% vehicle-delivery growth this year over 2021, though he acknowledged that reaching that target had become more difficult.
Mr. Musk has previously used the company's annual meeting as a platform for corporate announcements. Last year he said Tesla was moving its headquarters to Texas.
The investor gathering is likely to spotlight concerns that some shareholders have expressed about Tesla's corporate governance. Several of the nonbinding proposals deal with employment issues, from corporate efforts to prevent harassment and discrimination to how mandatory arbitration affects Tesla's employees and workplace culture.
The company is facing scrutiny from state and federal employment authorities over issues including alleged racial discrimination and harassment at its Fremont, Calif., assembly plant. The California Department of Fair Employment and Housing sued Tesla in February, saying that Black workers routinely heard supervisors using racial slurs and were confronted with racist graffiti in the factory. Tesla has alleged misconduct by the California agency and said it is seeking dismissal of the case.
In June, the U.S. Equal Employment Opportunity Commission reached conclusions similar to those of the California employment agency, Tesla said in a securities filing, adding that it planned to begin settlement talks with federal officials.
Also before shareholders is the proposed re-election of the Tesla directors Ira Ehrenpreis and Kathleen Wilson-Thompson, who have served on the board since 2007 and 2018, respectively.
The proxy advisory firm Institutional Shareholder Services has urged investors to vote against their re-election, citing concern about the board's risk oversight and Tesla's response to a measure that shareholders approved last year. That nonbinding proposal called on Tesla to cut board members' terms to one year, from three.
Instead, Tesla is asking shareholders to reduce directors' terms to two years. Such a proposal failed to gain the requisite votes last year or in 2019.
Reupping a proposal to institute two-year terms doesn't fulfill shareholders' wishes, ISS said in a recent report.
Oracle Corp. co-founder Larry Ellison, who joined the board in 2018, isn't standing for re-election, meaning Tesla's board is poised to shrink to seven members, from eight.
Write to Rebecca Elliott at rebecca.elliott@wsj.com
$(END)$ Dow Jones Newswires
August 04, 2022 05:30 ET (09:30 GMT)
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