Statutory Voting

AAA

DEFINITION of 'Statutory Voting'

A corporate voting procedure in which each shareholder is entitled to one vote per share and votes must be divided evenly among the candidates or issues being voted on. Statutory voting, sometimes known as straight voting, is one of two stockholder voting procedures and the more common option. In statutory voting, if you owned 50 shares and were voting on six board positions, you could cast 50 votes for each board member, for a total of 300 votes. You could not cast 20 votes for each of five board members and 200 for the sixth.

BREAKING DOWN 'Statutory Voting'

The other voting procedure is cumulative voting, which lets shareholders weight their votes toward particular candidates and improves minority shareholders' chances of influencing voting outcomes. In cumulative voting, you are allowed to vote disproportionately, so if you own 50 shares and are voting on six board positions, you can cast 300 votes for one director and none for the five other directors, 20 votes for each of five board members and 200 for the sixth, or any number of other combinations. To find out whether a company uses statutory voting or cumulative voting, consult its stockholder agreement.

RELATED TERMS
  1. Voting Right

    The right of a stockholder to vote on matters of corporate policy ...
  2. Voting Trust

    A legal trust created to combine the voting power of shareholders. ...
  3. Proxy

    1. An agent legally authorized to act on behalf of another party. ...
  4. Cumulative Voting

    The procedure of voting for a company's directors; each shareholder ...
  5. Voting Trust Agreement

    A contractual agreement detailing the specifics of the voting ...
  6. Voting Shares

    Shares that give the stockholder the right to vote on matters ...
Related Articles
  1. Mutual Funds & ETFs

    Proxy Voting Gives Fund Shareholders A Say

    You have the right to take part in important company decisions - even if you cannot attend the meetings.
  2. Bonds & Fixed Income

    What Are Corporate Actions?

    Be a savvy investor - learn how corporate actions affect you as a shareholder.
  3. Investing Basics

    Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
  4. Investing Basics

    What Owning A Stock Actually Means

    Think owning a stock gives you special privileges with the company? Think again.
  5. Bonds & Fixed Income

    Calculating Yield to Worst

    Yield to worst is the lowest possible yield on a bond that may be called in the future.
  6. Economics

    What Does Vesting Mean?

    Vesting is the process of accruing non-forfeitable rights.
  7. Economics

    What's a Conglomerate?

    A conglomerate is a corporation that’s comprised of several different independent businesses.
  8. Fundamental Analysis

    Explaining the Central Limit Theorem

    Central limit theorem is a fundamental concept in probability theory.
  9. Investing Basics

    Breaking Down Optimal Capital Structure

    An optimal capital structure shows the best balance of debt to equity a company can have in order to minimize its cost of capital.
  10. Investing Basics

    What Happens in a Haircut?

    One meaning of haircut is the difference between prices at which a market maker can buy and sell a security.
RELATED FAQS
  1. Who is responsible for protecting and managing shareholders' interests?

    The average shareholder, who is typically not involved in the day-to-day operations of the company, relies on several parties ... Read Full Answer >>
  2. Where do penny stocks trade?

    Generally, penny stocks are traded through the use of the Over the Counter Bulletin Board (OTCBB) and through pink sheets. ... Read Full Answer >>
  3. Where can I buy penny stocks?

    Some penny stocks, those using the definition of trading for less than $5 per share, are traded on regular exchanges such ... Read Full Answer >>
  4. How does the stock market react to changes in the Federal Funds Rate?

    The stock market reacts to changes in the federal funds rate in various ways depending on where it is in the business cycle. ... Read Full Answer >>
  5. What are the requirements for being a Public Limited Company?

    The requirements for an entity to be considered a public limited company (PLC) include registration requirements, establishing ... Read Full Answer >>
  6. Is there a difference between financial spread betting and arbitrage?

    Financial spread betting is a type of speculation that involves a highly leveraged derivative product, whereas arbitrage ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Depreciation

    1. A method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets for both ...
  2. Recession

    A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, ...
  3. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  4. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  5. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  6. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!