GM shareholders overwhelmingly defeat Greenlight proposal

Key Points
  • General Motors shareholders voted against a proposal to create two classes of stock.
  • The plan to split the stock was proposed by David Einhorn's Greenlight Capital.
  • GM shareholders also supported an incumbent slate of directors proposed by the automaker.
GM shareholders overwhelmingly defeat Greenlight proposal
GM shareholders overwhelmingly defeat Greenlight proposal

General Motors shareholders have rejected Greenlight Capital's plan to split the company's stock, and rejected the hedge fund's nominations to GM's board.

The automaker said Tuesday a preliminary vote count provided by its proxy solicitor at its annual shareholder meeting indicated the results.

The results indicated all of GM's board nominations were elected, with between 84 and 99 percent of votes cast. Greenlight's proposal was rejected with more than 91 percent of votes against it, or 96 percent of votes if Greenlight's votes were excluded, according to the release.

"On behalf of our Board and management, we appreciate the significant support of our shareholders as we continue to transform GM and increase the value of their investment," said Mary T. Barra, chairman and CEO, in a news release. "We value the perspectives of our shareholders and will continue to actively engage with them — and relevant external experts — as we enhance our core business, deploy capital to higher-return opportunities, and advance our leadership in the future of personal mobility."

Greenlight Capital founder and President David Einhorn had proposed splitting General Motors shares into two classes: one class would receive dividends, and the other would participate in growth and earnings.

"We decided to bring a creative idea to GM's shareholders and nominate directors to help fix GM's inefficient capital structure and unlock significant value for all shareholders," said Einhorn said in a statement sent to CNBC. "We are disappointed that shareholders have elected to maintain the status quo. We congratulate GM's management on their win today."

Many expected the proposal to fail. GM leadership opposed the plan, and shareholder advisory firms Institutional Shareholder Services and Glass Lewis both recommended GM shareholders vote against Greenlight's proposal.

GM stock has risen little since its initial public offering in 2010, hovering just above $33 per share.

Barra told reporters in a press conference before the vote that management considered Einhorn's idea carefully, but decided they want to pursue other means to unlock value for shareholders.

GM's Detroit-based competitor Ford has also failed to impress Wall Street in recent years, while shares Silicon Valley-based Tesla, which sells only a fraction of the vehicles of either major automaker, are reaching all-time highs.

-- CNBC's Scott Wapner contributed to this report.

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