Cumulative Voting
A voting method allowing shareholders to concentrate all votes on a single director candidate.
What is Cumulative Voting?
Cumulative voting is a method of shareholder voting in board director elections that allows shareholders to allocate their total votes — calculated as the number of shares held multiplied by the number of director seats to be filled — in any combination across candidates, including concentrating all votes on a single nominee. For example, a shareholder with 100 shares in an election with three director seats has 300 total votes to distribute. This mechanism gives minority shareholders greater ability to elect at least one board representative. Cumulative voting is mandated by California for many corporations but is less common in Delaware, where plurality voting is the default standard.
Example
In a three-seat board election, a shareholder with 1,000 shares has 3,000 cumulative votes. Under statutory voting, they would cast a maximum of 1,000 votes per candidate. Under cumulative voting, they could cast all 3,000 votes for a single candidate they favor, meaningfully increasing that candidate's probability of winning a seat.
Source: Investopedia — Cumulative Voting