Einhorn pushes GM with board nominees

April 12—David Einhorn is putting the pressure on General Motors again.

The billionaire investor's Greenlight Capital hedge fund announced a slate of three nominees to the GM board of directors in a preliminary proxy filing today with the U.S. Securities and Exchange Commission as the fund tries to push a stock split proposal.

Einhorn, who owns 52 million shares of GM stock, or just over 3% of GM's common stock, also has filed a shareholder proposal to split the automaker's stock into two classes, one designed for big dividend returns and another designed to reward shareholders if the automaker's profits and stock price grow.

After a number of meetings with Einhorn, GM's board rejected the idea and has urged shareholders to vote against it at the automaker's annual meeting in June.

Einhorn, president of Greenlight, has said the company's stock is undervalued and that his proposal would unlock billions of dollars in shareholder value.

Greenlight said it is nominating Leo Hindery Jr., managing partner of InterMedia Partners, Vinit Sethi, vice president and director of research at Greenlight, and William Thorndike Jr., managing director of Housatonic Partners, to the board. The nominations and Einhorn's proposal would be up for a vote at GM's annual meeting in June.

Greenlight said it believes GM's board “would benefit from the addition of new directors with fresh ideas and an investor's perspective to address the discounted price of the company's common stock. Therefore, we are nominating three nominees to help re-energize the board and bring additional focus to closing the valuation gap in GM's stock.”

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GM said in a statement that its evaluation of the stock proposal is unchanged. The company previously said the proposal “creates an unacceptable level of risk” and would not serve shareholders' best interests.

“General Motors presented Greenlight's dividend share idea to the rating agencies fully and fairly. The rating agencies' public statements issued regarding the Greenlight proposal clearly indicate that they understood the idea in all its facets and would represent a credit negative if implemented. Any suggestion to the contrary is baseless and irresponsible,” the company said.

Einhorn argued in an interview with Reuters that the company has refused to allow credit ratings agencies to formally rate his proposal.

GM's stock rose .06% Wednesday to close at $33.94.

Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence. Staff writer Brent Snavely contributed to this report.

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