Tesla Inc. has proposed a 3-for-1 stock split in its proxy statement filed late Friday, saying it would provide more flexibility for its employees managing their equity and serve as a recruiting tool.
rose nearly 2% in the extended session Friday after the news. The electric-vehicle maker did a 5-for-1 stock split in August 2020.
Tesla’s compensation, true to the company’s “startup origins,” it said, consist mostly of wages and equity awards.
“Whereas salary or wages are intended to meet our employees’ near-term liquidity needs, we believe that equity awards are an effective tool for retaining employees long-term,” the company said in the proxy.
Such “ownership culture” aligns the interests of employees with the long-term interests of stockholders, Tesla said.
The split would hinge on the approval of an increased share count. Tesla set its annual shareholder meeting for Aug. 4.