General Motors on Monday detailed in a regulatory filing contacts with billionaire hedge fund official David Einhorn who went public recently with a strategy to enhance the automaker’s value and revealed its slate of board candidates, all whom presently serve on the board.
Einhorn, who operates hedge fund Greenlight Capital, has proposed that General Motors produce 2 classes of stock, one that pays a dividend and one that does not, to enhance the No. 1 U.S. automaker’s share cost.
GM has turned down the proposal and rating agencies have stated it would negatively impact the company’s credit rating. Other investors in the automaker have likewise provided the proposal from Einhorn.
Einhorn has stated he would take his strategy to GM shareholders through a proxy contest where he intends to win board seats, though he has not revealed any names.
As per GM’s proxy filing, Einhorn initially reached out to the company in August, and followed with numerous of in-person meetings, teleconferences and calls, including with GM CEO Mary Barra.
GM said it also evaluated Einhorn’s proposal consisting of discussions with rating firms.
In December GM’s board examined analyses of Einhorn’s proposal carried out by management and financial consultants and “determined that it was not in the best interests” of GM or investors.
Greenlight, which has a 4.9 percent stake in automaker consisting of options, refused to comment.
In the filing GM likewise said that Barra’s wage, reward and awards declined more than 20 percent in last year to $22.6 million from $28.6 million in 2015.
The business said this reflected a one-time retention bonus of almost $11.2 million in stock options in 2015.
