Shareholder Proposal Seeks Reevaluation of Exec. Incentives for EVs at GM National Legal and Policy Center Argues That Company Pursues Gov’t Subsidies Over Environmental Altruism
Falls Church, VA
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June 03, 2024 11:45 AM Eastern Daylight Time
On June 4, National Legal and Policy Center will present a shareholder proposal at the General Motors Company advocating for GM’s board of directors to reevaluate the electric vehicle expansion targets included in its executive compensation packages.
The proposal, identified as Item No. 5 on the 2024 proxy ballot, argues that GM’s focus on electric vehicles is misaligned with both the market demand for EVs and the economic realities the company faces.
Last month NLPC filed a proxy memo with the Securities and Exchange Commission that explains its rationale for the proposal.
GM, like many in energy-intensive sectors, has increasingly aligned its corporate strategies with a poorly substantiated, government-subsidized, and corporate media-amplified “scientific consensus” that carbon emissions will result in catastrophic effects to the planet, and to humans.
These scenarios are increasingly unlikely, yet the corporate media continues to portray them as the default. Supposedly, this climate crisis can only be averted if governments and consumers adopt environmentally friendly technology, such as electric vehicles, en masse.
However, electric vehicles aren’t good for the environment. Even with government subsidies, they’re expensive and unprofitable. Further, consumers don’t want to make the switch.
Luke Perlot, Associate Director of NLPC's Corporate Integrity Project, stated, “Our proposal encourages a reassessment of GM’s current executive compensation incentives, which overly prioritize electric vehicle production without adequate consideration of the associated economic, environmental, and ethical risks. Instead, the company should remove these incentives and give its executive team the opportunity to pursue growth strategies without political bias.”
Key Details of the Proposal:
- Misalignment with Market Realities: Despite substantial investments and executive incentives, the anticipated demand for EVs has not materialized at the projected scale. An open letter to President Biden signed by over 5,000 auto dealerships warned of lack of demand for EVs.
- Economic Viability and Subsidy Dependence: GM's profitability in the EV sector is heavily reliant on government subsidies, which are subject to political changes and could be repealed as early as 2025. Without these subsidies, the division’s path to achieving positive pre-tax earnings, currently projected for no sooner than 2025, appears increasingly precarious.
- Environmental and Ethical Challenges: The extraction and processing of rare-earth elements, crucial for these batteries, are predominantly concentrated in regions with poor environmental and labor standards. This not only leads to severe ecological damage, but also involves significant human rights abuses, including forced labor. Further, these elements are primarily processed in China, a geopolitical adversary of the United States.
“Consumers still want internal combustion engine vehicles,” Perlot added, “and GM’s competitors are making substantial investments to meet their demand. The company cannot afford to be left behind because of misguided incentives.”
Founded in 1991, the National Legal and Policy Center promotes ethics in public life through research, investigation, education and legal action.
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