|
|
 | | | |
- close
- close
- close
- close
This excerpt taken from the EBAY DEF 14A filed May 16, 2005. Director Election
Majority Vote Standard Proposal
Resolved: That the shareholders of eBay Inc.
(“Company”) hereby request that the Board of Directors
initiate the appropriate process to amend the Company’s
governance documents (certificate of incorporation or bylaws) to
provide that director nominees shall be elected by the
affirmative vote of the majority of votes cast at an annual
meeting of shareholders.
Supporting Statement: Our Company is incorporated in
Delaware. Among other issues, Delaware corporate law addresses
the issue of the level of voting support necessary for a
specific action, such as the election of corporate directors.
Delaware law provides that a company’s certificate of
incorporation or bylaws may specify the number of votes that
shall be necessary for the transaction of any business,
including the election of directors. (DGCL, Title 8,
Chapter 1, Subchapter VII, Section 216). Further, the
law provides that if the level of voting support necessary for a
specific action is not specified in the certificate of
incorporation or bylaws of the corporation, directors
“shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting and
entitled to vote on the election of directors.”
21
Table of Contents
Our Company presently uses the plurality vote standard for the
election of directors. We feel that it is appropriate and timely
for the Board to initiate a change in the Company’s
director election vote standard. Specifically, this shareholder
proposal urges that the Board of Directors initiate a change to
the director election vote standard to provide that in director
elections a majority vote standard will be used in lieu of the
Company’s current plurality vote standard. Specifically,
the new standard should provide that nominees for the board of
directors must receive a majority of the vote cast in order to
be elected or re-elected to the Board.
Under the Company’s current plurality vote standard, a
director nominee in a director election can be elected or
re-elected with as little as a single affirmative vote, even
while a substantial majority of the votes cast are
“withheld” from that director nominee. So even if
99.99% of the shares “withhold” authority to vote for
a candidate or all the candidates, a 0.01% “for” vote
results in the candidate’s election or re-election to the
board. The proposed majority vote standard would require that a
director receive a majority of the vote cast in order to be
elected to the Board.
It is our contention that the proposed majority vote standard
for corporate board elections is a fair standard that will
strengthen the Company’s governance and the Board. Our
proposal is not intended to limit the judgment of the Board in
crafting the requested governance change. For instance, the
Board should address the status of incumbent directors who fail
to receive a majority vote when standing for re-election under a
majority vote standard or whether a plurality director election
standard is appropriate in contested elections.
We urge your support of this important director election reform.
|
| |||||||
