Definition of Cumulative Voting

Cumulative Voting is a method of voting that allows stockholders to cast all of their votes for one director or to distribute them among the candidates they wish to vote for. Cumulative voting favors smaller investors by allowing them to have a larger say in the election of the board of directors.

Applying "Cumulative Voting" to Securities Exams:

All common stockholders have the right to vote on the major issues relating to the corporation. One of the major events is the election of the board of directors. If an investor owns 200 shares of common stock and there are three members of the board to be elected the investor will have a total of 600 votes. This is found by multiplying the number of shares owned by the number of candidates to be elected. The cummulative method of voting allows the investor to cast all 600 votes for one candidate if they wish to.

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