Cumulative Voting Definition

Cumulative Voting

In corporations, a system of voting by shareholders for directors in which the shareholder can multiply his or her voting shares by the number of candidates and vote them all for one person for director. This is intended to give minority shareholders a chance to elect at least one director. For example, there are five directors to be elected and 10,000 shares issued. A shareholder with 1,000 shares could vote 5,000 for his or her candidate rather than being limited to 1,000 for each of five candidates and always being outvoted by shareholders with 1,001 or more shares.