DEFINITION of 'Supermajority'

A corporate amendment in a company's charter requiring a large majority (anywhere from 67-90%) of shareholders to approve important changes, such as a merger.

This is sometimes called a "supermajority amendment". Often a company's charter will simply call for a majority (more than 50%) to make these types of decisions.

BREAKING DOWN 'Supermajority'

For example, let's say the TSJ Sports Conglomerate is faced with a merger proposal from ABC Sports Inc. If the company has a supermajority amendment in it's charter, then before it is able to merge (even if management fully endorses the move) the company will need to hold a shareholder vote on the issue and gain a majority equal to, or greater than, the amendment specifies (anywhere from 67-90%).

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