Also known as "accumulation voting" and "weighted voting"; a semi-proportional system of voting that gives minority shareholders the opportunity to exercise corporate power by allowing them to allocate all of their votes as they wish to one or more vacant seats on the board of directors. This method of voting usually insures that minority shareholders can elect a chosen director to the board. This is in contrast to regular or statutory voting, where shareholders must only use one vote per share to vote on each individual seat of the board up for election.
Definition from Nolo’s Plain-English Law Dictionary
In corporations, a system of voting by shareholders for directors in which the shareholder can multiply his or her 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. 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 or her candidate rather than being limited to 1,000 for each of five candidates and always being outvoted by shareholders with 1,001 or more shares.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:14 pm