The fight was to be settled yesterday at the annual meeting, when shareholders vote on the proposal and also elect all 11 company directors.
Greenlight's dual-class stock would have split common shares into one class that would concentrate on dividends paid to investors based on GM's healthy profits, $2.6-billion net in 2016, and one that would "reflect GM's growth potential", according to Reuters.
"We made a decision to bring a creative idea to GM's shareholders and nominate directors to help fix GM's inefficient capital structure and unlock significant value for all shareholders", Einhorn said in a statement Tuesday.
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In a statement, Greenlight Capital said, "We are disappointed that shareholders have elected to maintain the status quo".
To support his proposal, Einhorn pointed out that GM's shares are "barely above" the price of their 2010 IPO, which followed a government-overseen restructuring.
But GM CEO Mary Barra said in a letter to shareholders that there's no evidence that Greenlight's plan will work and there may not be any demand for the new stock. He also insisted that the company has too much cash - about $20 billion, including marketable securities - and that his strategy represented the best way to create value. "We congratulate GM's management on their win today". The stock closed Monday up less than 1 percent to $34.46. The growth-potential stock was proposed to take advantage of GM's future mobility initiatives, including its Maven car-sharing program, its electric vehicle technology and its purchase a year ago of San Francisco-based Cruise Automation to advance autonomous auto technology. Einhorn's Greenlight Capital hedge fund owns 3.6 percent of GM. Ford Motor Co.in May ousted its chief executive, Mark Fields, who like Ms. Barra took over in 2014 after a career climbing the ranks. Greenlight aims to achieve high absolute rates of return while minimizing the risk of capital loss. But GM's stock is flatlining, US auto sales are sluggish and the competition for connected and self-driving cars is just getting on the road.
The company also says two independent evaluation firms have analyzed Einhorn's plan and recommended against it. In 2015, before being named chairman, she rallied directors and her management team to fend off a separate group of investors demanding billions in share buybacks and board representation.