Glass Lewis recommends that GM shareholders vote FOR ALL of the GM Board’s nominees and AGAINST the Greenlight proposal

General Motors Co. (NYSE: GM) today announced that Glass, Lewis & Co., a leading independent proxy advisory firm, has recommended that GM shareholders vote FOR ALL of the Board’s nominees and AGAINST the Greenlight proposal at the Company’s 2017 Annual Meeting of Shareholders to be held on June 6, 2017. Consistent with the Glass Lewis …

General Motors Co. (NYSE: GM) today announced that Glass, Lewis & Co., a leading independent proxy advisory firm, has recommended that GM shareholders vote FOR ALL of the Board’s nominees and AGAINST the Greenlight proposal at the Company’s 2017 Annual Meeting of Shareholders to be held on June 6, 2017.

Consistent with the Glass Lewis recommendations, GM urges shareholders to vote FOR ALL of the Board nominees and AGAINST the Greenlight proposal TODAY by telephone, online or by signing, dating and returning the WHITE proxy card in the postage-paid envelope provided.

In its May 25, 2017 report, Glass Lewis concluded:

  • “…we agree with the position of the incumbent directors that there are a number of risks and uncertainties associated with Greenlight’s plan, that it is speculative in nature and that the potential costs may outweigh the potential benefits.” (Glass Lewis Report, pg. 19)
  • “In its effort to consider Greenlight’s share separation proposal, we find that the GM board has gone to considerable lengths and it appears to have arrived at an informed and reasonable conclusion, in our view.” (Glass Lewis Report, pg. 19)
  • “…the current board and management team are taking reasonable steps to oversee the business for the benefit of shareholders, in our view.” (Glass Lewis Report, pg. 19)
  • “Regarding Greenlight’s effort to appoint its board nominees, we note the Dissident presents little evidence to suggest their appointment is for reasons other than to progress its share separation proposal. In our view, Greenlight has not specifically justified the removal of [the Board’s] Nominees…” (Glass Lewis Report, pg. 19)
  • “Ultimately, we are not convinced that a more aggressive approach is warranted or in the best interests of shareholders given the cyclical nature of the industry and current headwinds and disruption facing the industry.” (Glass Lewis Report, pg. 20)

Commenting on the GM Board and management’s successful execution of their transformational strategy, Glass Lewis stated:

  • “Overall, we find that the Company has articulated a clear strategy to create shareholder value and has demonstrated progress executing this strategy.” (Glass Lewis Report, pg. 16)
  • “…GM’s valuation is above that of several peers and we recognize that the broader automobile manufacturing industry trades at a significant discount to the S&P 500 Index, indicating industry-wide factors that are not unique to GM, in our view.” (Glass Lewis Report, pg. 19)
  • “We believe the incumbent board and management have articulated a clear strategy with defined targets, including target ROIC of at least 20% and are taking reasonable steps to execute on this plan. The Company plans to have returned approximately $25 billion to shareholders from 2012 through the end of 2017, including a significant planned return of capital in 2017.” (Glass Lewis Report, pg. 19)

Additionally, Glass Lewis cited the serious risks to GM and its shareholders if the Greenlight proposal were adopted:

  • “[Greenlight’s] security would likely negatively impact the Company’s financial flexibility, in our view.” (Glass Lewis Report, pg. 17)
  • “In particular, the potential market for the dividend shares is unproven and there may be limited interest in a security of this nature.” (Glass Lewis Report, pg. 19)
  • “While the credit impact of the dividend shares would likely depend on the specific terms, a true preferred security would likely have a negative credit impact and a truly common security would have no dividend obligation and may not be well received by investors, in our view.” (Glass Lewis Report, pg. 19)
  • “Furthermore, the dual share class structure would create competing interests among the holders of dividend shares and capital appreciation shares, introducing potential conflicts of interest as well as greater corporate governance complexity and uncertainty.” (Glass Lewis Report, pg. 19)
  • “The board would need to balance the interests of the holders of dividend shares, who would prefer greater assurance of steady dividend payments, against the interests of the holders of capital appreciation shares, who would likely prefer greater investment in future growth. We expect the competing interests of these two share classes would be frequent and ongoing and that the governance structure needed to manage them would be suboptimal.” (Glass Lewis Report, pg. 17)
  • “Furthermore, this proposal is not intended to, and does nothing to address the underlying fundamentals of GM’s business.” (Glass Lewis Report, pg. 17)

Glass Lewis also notes that the proposal and Greenlight’s nominees are linked and that it sees no reason to justify removal of the Board’s nominees:

  • “Regarding Greenlight’s effort to appoint its board nominees, we note the Dissident presents little evidence to suggest their appointment is for reasons other than to progress its share separation proposal. In our view, Greenlight has not specifically justified the removal of [the Board’s] Nominees…” (Glass Lewis Report, pg. 19)

Your vote is important, no matter how many or how few shares you own. To follow the recommendations of Glass Lewis and the Board, shareholders should vote the WHITE proxy card FOR ALL your Board’s nominees and AGAINST the Greenlight proposal TODAY by telephone, online or by signing, dating and returning the WHITE proxy card in the postage-paid envelope provided.

View the full press release .

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