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Detroit — Investors delivered a vote of confidence for General Motors Co.’s leadership and direction by rejecting a stock-split proposal. But the company still faces the challenge of boosting a stock price that has climbed only minimally in the six years since its initial public offering after emerging from bankruptcy.

Shareholders overwhelming voted no on a proposal by Greenlight Capital Inc. to create a two-tier stock structure for GM to split the company’s stock. GM officials, led by Chairman and CEO Mary Barra, had pushed strongly for rejection.

Only 9 percent of shareholders voted to back Greenlight’s challenge to GM leadership, according to preliminary numbers released Tuesday at the automaker’s annual shareholders meeting in Detroit. Voters also rejected three candidates backed by Greenlight for GM’s board of directors.

In the aftermath of the vote, GM’s share price closed down 4 cents – or 0.1 percent – to $34.43 Tuesday, recovering after shares had dropped as low as $34.11 immediately after the meeting.

“The overwhelming rejection of the Greenlight proposal and election of GM’s directors suggest the automaker’s shareholders are generally satisfied with the direction CEO Mary Barra and her colleagues are taking the company,” said Michelle Krebs, a senior analyst for Autotrader. “Undoubtedly, they would still like the stock price to rise.”

For months GM has battled Greenlight, which is headed by billionaire president David Einhorn. At issue was Greenlight’s proposal to split GM’s stock into two equities in the hope of creating tens of billions of dollars in shareholder value. The automaker’s stock has failed to excite investors, despite record earnings. The S&P 500 index has more than doubled in value over the past six years.

Prior to Tuesday’s shareholders meeting, Barra met with journalists and discussed what it will take to get GM’s stock price to move. Traditional automakers have failed to make a splash with Wall Street while some of their Silicon Valley competitors – Tesla Inc. in particular – have had a run-up in stock valuations.

Barra talked of a long-term approach, saying GM needed to earn its way quarter by quarter with consistent positive results. In facing off with the Teslas, Waymos and Ubers of the world, Barra said she puts her faith in her company’s previous investments in autonomous and electric technologies, as well as its proven ability to manufacture products.

“So it’s not only having an exceptionally strong core business that’s going to outperform during any downturn, but it’s also in the transformative technologies (where) we believe we have significant assets,” she said. “Because we understand how to put vehicles on the road that last for, on average, 11 years and are of an automotive grade.”

No Greenlight representative spoke at Tuesday’s meeting. The investment group owns about 52 million shares, or 3.6 percent, of GM’s stock.

In a statement released after the vote, Einhorn said: “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. We are disappointed that shareholders have elected to maintain the status quo. We congratulate GM’s management on their win today.”

In previous media appearances, Einhorn had harsh words for GM’s capital structure.

“It has a balance sheet that’s fundamentally too conservative for the value that’s created in the operations to be unlocked,” he told Bloomberg Television last week, citing a $50 billion market capitalization and GM’s $20 billion of cash, plus available credit.

Facing similar stock pressures, Ford Motor Co. executed a leadership shakeup up last month. It ousted CEO Mark Fields in favor of the carmaker’s Smart Mobility chief Jim Hackett.

Barra, whose profile has only grown since taking GM’s top spot in January 2014, has fared far better. But Tuesday, she and her company took some criticism from shareholders in attendance.

One speaker criticized GM’s heavy investment in electric vehicles, characterizing it as a money-loser like the company’s Opel-Vauxhall arm in Europe. GM sold the operation to French carmaker PSA Group in March.

“The Chevy Bolt is attempting to be a leader in a field that no one makes money in,” the Saginaw resident said. “Our own management has stated our goal is to be the first profitable company making an extended-range electric vehicles, acknowledging that no one makes money selling electric vehicles at this time. I did not think this is the most profitable use of our capital...”

Barra countered, saying carmakers are required to offer vehicles with zero emissions to meet U.S. and some foreign regulations.

“We think this is a very important investment in the future in addition to it being the foundation for autonomous vehicles... so we see it as a very strategic investment, due to regulatory requirements that are different around the globe, a very necessary part of our portfolio.”

Among the higher-profile critics was civil rights activist the Rev. Jesse Jackson Sr., who criticized what he saw as a lack of diversity in GM’s leadership. “I’m concerned that our board (should) look like our market,” he said. “It does not.”

Jim Dollinger, who described himself as a Buick dealer from the Flint area, said lots are “choking” on too much inventory right now. While crediting Barra’s performance, he called on company officials to split Barra’s dual roles as chairman and CEO.

“You can’t focus on long-term strategies and day-to-day operations,” he said. “You can’t do both.”

A ballot measure on Monday’s agenda called for GM’s board of directors to be headed by an independent chairman, a move that one supporter said would improve accountability. Shareholders rejected the proposal.

JLynch@detroitnews.com

(313) 222-2034

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