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CFA Level I · CFA Level I Exam · Equity Jurisdictions, Classes, and the Voting Process

In a company using statutory voting, a shareholder owns 200 shares and five directors are to be elected. Under statutory voting, the shareholder is most likely able to:

Under statutory voting the shareholder casts up to 200 votes, one per share, for each of the five seats separately. Concentrating all 1,000 votes on one candidate is possible only under cumulative voting, which gives minority holders more influence.

  1. Acast at most 200 votes for each of the five director seatsCorrect
  2. Bpool all 1,000 votes behind a single candidate
  3. Cvote only on the first director seat and abstain on the rest

Explanation

Under statutory voting each share carries one vote per directorship, so the holder casts up to 200 votes for each of the five seats. Pooling votes behind one candidate is cumulative voting, which is a different method.

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