GM Shareholders Reject Einhorn’s Stock Split Plan

General Motors Co. shareholders rejected by a 9:1 margin a proposal by investor David Einhorn to create two forms of GM common stock in a bid to unlock value in the company.

Einhorn’s Greenlight Capital Inc., which holds 3.6% of GM shares, proposed the dual stock to energize GM’s share price, which hasn’t moved significantly since the company’s initial stock offering more than six years ago. GM shares, which debuted in late 2010 at $33, opened today at $34.31.

Under Greenlight’s plan, GM would continue to offer common stock and pay dividends on those shares but also offer a new stock indexed to the value of earnings. Einhorn contended that the latter shares would sell at a higher price and attract more adventuresome investors—and hiking GM’s market capitalization by as much as 70% in the process.

But shareholders concurred with GM’s assessment that Einhorn’s scheme was untested and “unacceptably risky.” GM’s case against the two-stock plan was bolstered in March when credit rating agencies warned that implementing the new stock could hurt the carmaker’s investment rating, thereby raising its borrowing costs.

Shareholders also rejected three board nominees presented by Greenlight. Instead, they approved all 11 of GM’s slate of board members.