Number of Directors Who Failed to Receive Majority Support is Down from Last Year, CII Research Reveals
Thursday, August 10, 2023
by: Emmanuel Tamrat

Section: August 10, 2023 | Vol. 28, Issue 29

The number of uncontested directors who failed to receive majority support from January to June 2023 was down 32% compared to the number of directors who did not win that level of support during the same time frame in 2022, CII found. Forty directors at 28 companies failed to receive majority support in that period in 2023, compared to 59 directors across 47 companies during the same time last year. CII has sent letters to the boards of each of the companies inquiring how they plan to respond to these votes.

Directors at some companies also have failed to receive majority support for consecutive years. These companies are of greatest concern to CII because they consistently fail to respond to their shareowners. This year, directors at Ashford Hospitality Trust, G-III Apparel Group, TG Therapeutics and Tutor Perini were re-elected despite failing to win majority support for as many as five consecutive years.

Most companies have plurality voting standards for uncontested director elections, which means that an incumbent director running uncontested needs only one vote to win. Some companies have majority voting standards for uncontested elections, but in practice these firms’ boards often reject the resignation letters of the directors who fail to win majority support.
This year, five directors who failed across three companies with majority vote standards had their resignations rejected by the companies. Last year, of the 18 directors who failed across 15 companies with majority vote standards, just eight had their resignations accepted.