Why Nio Will Hold An Extraordinary Meeting Of Shareholders On June 3

Nio announced last week it is holding an extraordinary general meeting, or EGM, of shareholders in Shanghai on June 3.

What's An EGM: An EGM is any shareholder meeting called by the company other than the regularly scheduled annual general meetings. It is usually convened when something unexpected or urgent comes up between annual shareholders' meetings.

Why Is Nio Holding An EGM: Nio plans to increase its number of board members from the current five in order to improve the diversity and flexibility of the board, the company's founder, Chairman and CEO William Li said in the first-quarter earnings call.

Related Link: Nio Working On Lower-Priced Model With Lithium Iron Phosphate Battery: Report

Li also said the company wishes to give its user trust the right to nominate directors to the board, although the right to appoint directors will be retained by the board.

The company may be using the meeting to get nominations to fill in the enlarged board size.

Nio's user trust, which was established at the time of the IPO, has so far been focused on environmental protection, industry subcommittees, social welfare and user care, Li said. The company now wants to allow the trust to take part in decision making, and this will be proposed at the meeting, he added.

"This also showcases our ... vision of building a user enterprise, which will also help us to deepen our relationship with the users for the long run," Li said.

Nio shares, which are trading well off their all-time high hit at the start of the year, ended Friday's session up 2.18% at $39.84.

Related Link: Investment Arm of World's Second-Largest Reinsurer Swoops In On Nio, Tesla Stock In Q1

Photo courtesy of Nio.