This excerpt taken from the GM DEF 14A filed Apr 29, 2005.
The Board of Directors recommends a vote AGAINST the adoption of this proposal for the following reasons:
At all meetings of stockholders of General Motors, items subject to a stockholder vote are approved if they receive a majority of the votes present, whether in person or by proxy, as indicated on page 2 of this proxy statement, and in accordance with Section 1.7 of the GM Bylaws, unless a larger percentage is legally required. GM’s Certificate of Incorporation and Bylaws do not require approval of any actions by more than a majority of shares voted. Other companies that may have considered similar proposals may have required approval of certain transactions by a “supermajority,” but the history of those proposals is not relevant to GM’s situation, since General Motors does not have any such requirements in place. Since GM has not adopted any “supermajority” requirements, this proposal is unnecessary and would not have any effect on GM’s corporate governance, which currently provides many safeguards for stockholders’ interests.
The proponents suggest that this simple majority proposal would eliminate the risk that as few as one percent of the outstanding stock could “frustrate the will of the shareholder majority.” Any threshold for voting, however, inevitably creates the risk that in a close vote a few shares will be pivotal, so that one percent—or even one share—could be decisive, in exceeding a requirement of 50%, 66%, or even more.
Because the proposal would not eliminate the risk that a few shares could determine a close vote and because General Motors has not adopted any requirements for stockholder approval by more than a majority, the proposal is misleading and unnecessary.