Tesla submitted a proposal for a three-for-one stock split to the US Securities and Exchange Commission as it seeks to make its stock more accessible to retail shareholders.
The request is included in a list of provisions Tesla plans to bring up at its August 4, 2022 shareholder meeting, the electric vehicle maker said in its annual proxy statement to the SEC on Friday.
“Our success depends on attracting and retaining excellent talent by offering outstanding benefits and highly competitive compensation packages. We offer every employee an option to receive equity,” Tesla said.
“Since our stock split in August 2020 to June 6, 2022, our stock price has risen 43.5 per cent. While this value appreciation has led to our employees benefiting enormously through the years, we want to make sure all employees, no matter when they join, have access to the same advantages.”
The stock split would help reset the market price of Tesla’s common stock so that its employees will have more flexibility in managing their equity, the filing said.
In March, Tesla said it would ask its shareholders at the 2022 annual meeting to vote on another stock split, following one two years ago.
A stock split is when a company issues new shares and distributes them to existing shareholders.
“A 4-for-1 stock split, for instance, would mean that current investors with one share receive three additional shares so that following the share split, they now own four shares,” said Chris Davies, a chartered financial planner at The Fry Group.
All a stock split does is change the number of outstanding shares of a company’s stock without altering the shareholders’ ownership percentage in the company.
Shares surged significantly when Tesla announced a five-for-one split in August 2020. Technology companies Alphabet and Amazon announced splits this year to reduce the price of their shares.
It is widely believed that companies perform stock splits to democratise ownership of their shares. Stocks that have had a wild run-up in prices tend to squeeze out retail investors who may not be able to afford it.
By undertaking a stock split, companies try to make their shares more attractive and accessible to retail investors.
“As retail investors have expressed a high level of interest in investing in our stock, we believe the stock split will also make our common stock more accessible to our retail shareholders,” Tesla said in the SEC filing.
In the proxy filing, the Texas-based electric vehicle and renewable energy business revealed that board member Larry Ellison, who is also the co-founder of Oracle, does not plan to stand for re-election. He currently owns 1.5 per cent of Tesla shares.
The filing also showed that Tesla's billionaire chief executive Elon Musk currently holds 23.5 per cent of the company’s shares, Vanguard holds 6 per cent and Blackrock accounts for 5.1 per cent of shares.
Mr Musk, who recently struck a deal to acquire Twitter for $44 billion, has sold about $8.5bn worth of Tesla shares in an apparent move to begin funding his buyout of the microblogging platform.
In 13 different proposals suggested by shareholders, Tesla is being asked to examine and disclose more about its anti-harassment and discrimination efforts, board diversity, lobbying practices, supply chains and labour, and details about its own water use and water-related climate impacts and risks.
Tesla's giga factory in Austin- in pictures
Tesla had a strong start to the year, passing the $3bn mark in quarterly net profit for the first time in the January to March period.
The world's most valuable car maker reported that first-quarter net profit rose more than seven times year-on-year to more than $3.3bn, about $2.8bn more than the income earned during the same period in 2021.
Revenue during the period jumped 81 per cent to more than $18.7bn, exceeding analysts’ expectation of $17.8bn.
THE BIO
Age: 33
Favourite quote: “If you’re going through hell, keep going” Winston Churchill
Favourite breed of dog: All of them. I can’t possibly pick a favourite.
Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?
Favourite colour: All the colours that dogs come in
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
UAE currency: the story behind the money in your pockets
New Zealand squad
Tim Southee (capt), Trent Boult (games 4 and 5), Colin de Grandhomme, Lockie Ferguson (games 1-3), Martin Guptill, Scott Kuggeleijn, Daryl Mitchell, Colin Munro, Jimmy Neesham, Mitchell Santner, Tim Seifert, Ish Sodhi, Ross Taylor, Blair Tickner
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
Match info
Karnataka Tuskers 110-3
J Charles 35, M Pretorius 1-19, Z Khan 0-16
Deccan Gladiators 111-5 in 8.3 overs
K Pollard 45*, S Zadran 2-18
Netherlands v UAE, Twenty20 International series
Saturday, August 3 - First T20i, Amstelveen
Monday, August 5 – Second T20i, Amstelveen
Tuesday, August 6 – Third T20i, Voorburg
Thursday, August 8 – Fourth T20i, Vooryburg
The specs: 2019 Jeep Wrangler
Price, base: Dh132,000
Engine: 3.6-litre V6
Gearbox: Eight-speed automatic
Power: 285hp @ 6,400rpm
Torque: 347Nm @ 4,100rpm
Fuel economy, combined: 9.6L to 10.3L / 100km
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
