Harry Wilson Explains Why He Withdrew His Nomination From GM's Board

General Motors Company GM struck a deal with activist investor and Maeva Group chairman & CEO, Harry Wilson, on Monday. According to the terms of the deal, Wilson will be withdrawing his nomination from GM's Board of directors and drop the proposal that asked GM to buy $8 billion worth of stock by second-half of 2016.

Wilson was on CNBC Tuesday to discuss why he agreed on withdrawing his nomination for a seat on GM's Board.

Clarity On Spending Decisions

"What we really tried to do was engage in a dialogue with the company around their capital allocation policies and the buyback was a tiny portion of that," Wilson said. "The real question was, when you think about this business that generates an enormous amount of cash from the sale of cars and then makes a series of decision around that cash, how much to invest in R&D, how much to invest in capex, how much to invest in marketing, how much to return to shareholders."

He continued, "And our argument was that from the public disclosure, the company was not very clear on how it made those decisions, which gave investors a lot of pause, which led to a discount in the stock […] the stock being undervalued. And the company needed to [perform] a thoughtful framework that would be both clear about how they made those decisions and then give investors some real clarity on that."

Comprehensive Capital Allocation Framework

Wilson was asked what other things that GM did makes up for the difference between the $8 billion buyback he suggested and the $5 billion buyback GM agreed to. He replied, "They came forward with a very comprehensive capital allocation framework and if you go through their [deck] from yesterday it lays it out in pretty clear detail."