WVU BCOR 320 - Rights of shareholders (4 pages)

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Rights of shareholders

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Rights of shareholders


Lecture number:
Lecture Note
West Virginia University
Bcor 320 - Legal Environment of Business

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BCOR 320 1nd Edition Lecture 38 Chapter 20 Corporations cont Rights of shareholders Right to vote Corporation must have at least one class of stock with voting rights Shareholder meetings Norm for publicly traded companies Proxies The person whom a shareholder appoints to vote for her at a meeting of the corporation The document a shareholder signs appointing this substitute voter Annual report A document containing financial data Securities and Exchange Commission SEC requires that public companies provide it to their shareholders each year Shareholder proposals Under SEC rules any shareholder who has continuously owned for one year at least 1 percent of the company or 2 000 of stock Can require that one proposal be placed in the company s proxy statement to be voted on at the shareholder meeting Election removal of directors A nominating committee from the board of directors produces a slate of directors with one name per opening Leads to a complex and expensive process Disruptive to the company Plurality voting To be elected a candidate only needs to receive more votes than her opponent not a majority of the votes cast A traditional corporate voting method Majority voting systems 79 percent of S P 500 refuse to seat a director if Fewer than half of the shares that vote tick off her name on the ballot These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Independent directors Sarbanes Oxley Act SOX stipulates that all members of a board s audit committee must be independent At least one of these members must be a financial expert The NYSE and NASDAQ require that for companies listed with them Independent directors must comprise a majority of the board They must meet regularly on their own without inside directors Only independent directors can serve an audit compensation or nominating committees Audit committees must have at least three directors who are financially

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