Question

Avco Inc., a Nebraska Corporation, is having its annual meeting. They are electing a new board of 5 directors. Boris owns 3000 shares, Grutz owns 5000 shares, Zack owns 2500 shares and Sven owns 1500 shares. Under cumulative voting, what is the minimum number each shareholder can elect? Fully Explain & Show your math!

Answer 1

Under cumulative voting, what is the minimum number of each shareholder can elect:

Boris:

3000 shares * 1 vote per share * 5 positions to elect board of directors = 15000 votes .

Grutz:

5000 shares * 1 vote per share * 5 positions to elect board of directors = 25000 votes

Zack:

2500 shares * 1 vote per share * 5 positions to elect board of directors = 12500 votes.

Sven:

1500 shares * 1 vote per share * 5 positions to elect board of directors = 7500 votes.

Explanation :

Cumulative voting:-

Cumulative voting is a multi-voting system used by companies to promote a more proportional representation for shareholders. In cumulative voting, each shareholder is entitled to one vote per share, multiplied by the number of available director positions , with the votes being distributed in whatever proportion the shareholder prefers.