Wal-Mart has changed the rules governing the election of directors to the retailer’s board.
Until now, directors had been elected by plurality, in which candidates who received the most votes were elected. Now, the board has adopted a majority voting standard, meaning that each nominee must gain a majority of the votes cast in order to be elected to the board. Plurality voting will still apply in contested elections, where the number of candidates exceeds the number of available seats on the board.
“The majority vote standard has been proposed by our shareholders in previous years,” said Wal-Mart board chairman Rob Walton. “We believe that due to recent changes in Delaware law, the majority vote standard is now in the best interests of the company and its shareholders.”
The Delaware General Corporation Law was amended in August of this year. Under the new legislation a director can submit an irrevocable resignation in advance of an election that would take effect upon his or her failure to achieve a specified vote for reelection.