A shareholder owns 100 shares and there are three positions on the board of directors. How many votes does this shareholder have and what is the proper term for this voting right?

Question

Quizplus · Accepted Answer

A board of directors with three members and a shareholder with 100 shares would have 300 votes, thus using cumulative voting rights. Cumulative voting rights permits a shareholder to cast votes equal to the number of positions on the board of directors times the number of shares owned, allocated in any way the shareholder sees fit. Cumulative voting helps to protect minority shareholders' right to management.

A Shareholder Owns 100 Shares and There Are Three Positions