A number of U.S. public companies are adopting majority vote proposals, a move that gives shareholders a stronger voice in electing directors.
A study by the Chicago law firm of Neal, Gerber & Eisenberg LLP found that 87 companies have recently adopted majority vote provisions. That means a candidate running for a seat on the board must receive a majority of either votes cast or votes available to be elected. Nearly all companies that adopted the provisions defined majority as the majority of votes cast.
Most board of director elections are uncontested and based on plurality, said Claudia Allen, partner and chair of the law firm’s Corporate Governance Practice Group.
“As long as you get one vote, you get in,” she said.
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