Cumulative Voting

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Cumulative Voting

A method of election of the board of directors used by corporations whereby a stockholder may cast as many votes for directors as he or she has shares of stock, multiplied by the number of directors to be elected.

A plan used for the election of members to the lower house of the Illinois legislature by which voters, each of whom is given three votes, may cast all of the votes for one candidate or allocate them among two or three candidates.

The purpose of cumulative voting is to facilitate the representation of minority stockholders on the board. The stockholder may cast all of his or her votes for one or more, but not all, of the directors on the ballot, which therefore promotes representation of small shareholders. Cumulative voting is mandatory under the corporate laws of some states and is allowed in most states.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

cumulative voting

n. in corporations, a system of voting by shareholders for directors in which the shareholder can multiply his voting shares by the number of candidates and vote them all for one person for director. This is intended to give minority shareholders a chance to elect at least one director whom they favor. For example, there are five directors to be elected, and 10,000 shares issued, a shareholder with 1,000 shares could vote 5,000 for his candidate rather than being limited to 1,000 for each of five candidates, always outvoted by shareholders with 1,001 or more shares.

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
(NASDAQ: CIVB) said its shareholders have voted to approve proposals to eliminate pre-emptive rights and cumulative voting at a special meeting of shareholders.
It was a cumulative voting system: 15 board members to be elected by all ratepayers, all with 15 votes that they could distribute however they wished, including 'plumping' all on one candidate, should they choose.
Sebi's paper proposed that all independent directors should be appointed by minority shareholders only and also suggested that there could be proportional or cumulative voting while electing such directors.
The new amendments to the Kyrgyz law on joint-stock companies, developed with IFC's advice, introduce mandatory cumulative voting which allows for a more proportional representation and gives minority shareholders more power to elect board representatives.
His group, National Popular Vote, is urging states to adopt election processes such as multi-member districts and cumulative voting rules to protect the political franchise of all Americans.
In addition, the proposal from the shareholders asking AT&T to adopt cumulative voting for directors was put to vote at the meeting, which was reportedly defeated by a vote of 66.8% against to 33.2% in favour.
Guinier advocates the use of cumulative voting as a remedy, on the theory that cumulative voting better respects the preferences of all voters by permitting more effective expression of preference intensity.
Stockholders also voted against a shareholder proposal related to cumulative voting, and in favor a proposal of amendment to US Airways Groups amended and restated certificate of incorporation to increase its authorized common stock from 200 million shares to 400 million shares.
Stockholders also ratified the appointment of KPMG LLP as US Airways' independent registered accounting firm; voted against a shareholder proposal that was related to cumulative voting; and voted in favour of a proposal to amend the company's amended and restated certificate of incorporation to increase its authorised common stock from 200m shares to 400m shares.
Cumulative voting, for example, enables minority shareholders to elect some directors even against the controller's wishes, (132) Both the CGQ and the Anti-Director Rights Index treat cumulative-voting arrangements favorably.
For example, several small/ rural communities in the region have adopted nontraditional electoral structures such as Limited Voting and Cumulative Voting to resolve voting rights disputes.