Table of Contents
Table of Contents

Tesla (TSLA) Shareholders Approve 3-For-1 Stock Split

Approval comes as Tesla's market value rebounds toward $1 trillion

Shareholders of Tesla, Inc. (TSLA) approved a 3-for-1 split of the company's common stock at its annual meeting held after the close of the markets on Aug. 4, 2022, according to a preliminary tally announced at the meeting. A final count will be issued on SEC Form 8-K within four business days. The vote increases Tesla's authorized common shares from 2 billion to 6 billion. Tesla reports that had it had just over 1 billion common shares outstanding as of June 6, 2022.

Tesla's annual meeting also had votes on eight proposals submitted by shareholders. The preliminary tally indicates that seven of them were rejected, as recommended by management. However, the preliminary results indicate that Proposal Six on the agenda, to increase shareholders' ability to nominate competing candidates for board seats, passed.

Key Takeaways

  • Shareholders of Tesla, Inc. (TSLA) voted to approve a 3-for-1 split of the company's common stock.
  • The preliminary vote tally was announced at Tesla's annual meeting on Aug. 4, 2022. Final results will be released within four business days.
  • Tesla's stated rationale is to give employees "more flexibility in managing their equity," and to increase the stock "more accessible" to retail investors.
  • A proposal aimed at giving shareholders more power to nominate competing candidates for board seats appears to have passed, despite opposition by management.

Why Tesla Wanted a Stock Split

In its proxy statement, Tesla stated that attracting and retaining top talent is the primary motivation for seeking to split its common stock. The company says that, unlike other manufacturers, it gives every employee the opportunity to receive equity. Tesla notes that, from its last split in August 2020 to the date of proxy statement on June 6, 2022, the price of its shares rose by 43.5%. Since then, it has continued to advance.

Tesla says that reducing the market price of its common stock through a split will give its employees "more flexibility in managing their equity." The company believes increasing employee satisfaction in this manner may help to maximize stockholder value. Tesla also expects that reducing the share price through a stock split will make its common stock more accessible to retail investors, which it sees as a positive development.

While a stock split theoretically should not alter the valuation of all shares outstanding, lowering the price per share may attract more potential buyers, boosting the stock's aggregate valuation somewhat.

Tesla's common stock plunged from its record high in November 2021 and fell to a low in June of this year, when it began to stage a strong advance, approaching $1 trillion in market value. The stock closed at $925.90, up by $3.71 (0.40%), on Aug. 4, 2022. The effective date of the split was not announced. Tesla shares were up less than 1% in extended trading.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Tesla, Inc. "2022 Annual Meeting of Stockholders Livestream."

  2. Tesla, Inc. "Notice of 2022 Annual Meeting of Stockholders," Page 18.

  3. Reuters. "Tesla shareholders broadly follow board recommendations at annual meeting."

  4. Yahoo! Finance. "Tesla Stock."

Take the Next Step to Invest
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.