Also known as: majority vote · majority votes · majority rule
Written by attorneys — see sources below.
A voting system in which each participant casts one vote on a matter and approval occurs only when more than half the votes cast favor the proposition. The system applies to elections of representatives as well as to decisions by boards, associations, and legislative bodies. It produces binding outcomes once the threshold is crossed and treats abstentions as outside the count unless a governing document provides otherwise.
Midwest Airlines contracted to purchase a warehouse from Momentum Capital. Before closing a fire destroyed the building. At a subsequent meeting of Momentum Capital's board the directors voted by majority to insist on closing. Because majority voting approved the decision the buyer remained obligated to perform and could not rescind the contract.
Shareholders of Metro Bank sued several directors for self-dealing. The board convened a meeting at which a quorum of qualified directors was present. By majority vote those directors determined that continuing the suit was not in the corporation's best interests. The court therefore dismissed the action.
Owners in a lakeside subdivision formed Crest Underwriters by majority vote of the lots. The association then voted by majority to require all members to purchase insurance through a designated carrier and to pay annual assessments. Anthony refused to pay. The court enforced the assessments because the majority decision was within the community's powers.
A bus driver glanced at a phone in violation of a regulatory ordinance. The resulting drift caused a cyclist to swerve into oncoming traffic and die. Under the majority approach the court asked whether death was a foreseeable result of the misdemeanor. Because a majority of jurisdictions apply that test the driver faced manslaughter liability.
After a demand letter the board of Pinnacle Manufacturing appointed a two-director committee of qualified directors. The committee recommended against pursuing claims. By majority vote of the committee the board adopted the recommendation. The court dismissed the derivative suit because the statutory procedure had been followed.
Signal proposed to acquire the remaining shares of UOP at twenty-one dollars per share. A majority of the minority shares approved the merger after full disclosure. The court nevertheless examined the entire fairness of the price because majority approval alone did not insulate the transaction from fiduciary review.
In 1974 Signal Companies sold its Signal Oil and Gas subsidiary for $420 million in cash and began seeking investment opportunities. In April 1975 Signal negotiated with UOP and agreed to purchase 1.5 million newly issued UOP shares plus 4.3 million publicly held shares via tender offer, all at $21 per share, giving Signal 50.5 percent ownership. UOP stock had been trading just under $14 per share immediately before the announcement. Signal nominated six directors to UOP's thirteen-member board and later replaced UOP's president with James C. Crawford, a longtime Signal subsidiary executive who also joined Signal's board. UOP recorded a $35 million operating loss in 1975 after the Come-By-Chance refinery entered bankruptcy, but by the end of 1977 its gross revenues reached $730 million and net income per share stood at $2.74, nearly matching 1974 performance. In February 1978 Signal officers Arledge and Chitea, who also served as UOP directors, prepared a feasibility study concluding that acquiring the remaining 49.5 percent interest at any price up to $24 per share would be a good investment for Signal. Signal's Executive Committee then authorized management to negotiate a cash merger at a price in the $20 to $21 range. On February 28, 1978 Signal issued a press release announcing negotiations for acquisition of UOP's minority interest. Crawford contacted UOP's non-Signal directors individually and retained Lehman Brothers to render a fairness opinion, agreeing to a $150,000 fee after initial discussions of $250,000. On March 6, 1978 the boards of both companies met and approved the merger agreement at $21 per share, with Signal-affiliated UOP directors abstaining on advice of counsel. Lehman Brothers delivered its two-page opinion letter stating that $21 was fair. The May 1978 proxy statement described the price determination as resulting from "discussions" between Crawford and Signal officers, attached the Lehman Brothers opinion letter, and reported that UOP's board had approved the merger unanimously. At the May 26, 1978 annual meeting 56 percent of the minority shares were voted, approving the merger by a nearly 12-to-1 margin among those voting and producing 76.2 percent overall approval when combined with Signal's shares. The merger closed the same day, converting each minority share into a right to receive $21 cash. William B. Weinberger, a former UOP shareholder, filed a class action in the Court of Chancery on behalf of all UOP shareholders as of May 26, 1978 who had not exchanged their shares for the merger price. An initial complaint was dismissed for failure to state a claim. An amended complaint followed, and the case proceeded to an eleven-day trial in October 1980.
Majority voting requires more than half the votes cast for a candidate to win. Plurality voting elects the candidate with the most votes even if that total is less than a majority. Corporate governance reforms have shifted many public companies from plurality to majority voting so that a nominee who receives more votes against than for must tender a resignation.
…than a void, act. Hence, the merger can be sustained, notwithstanding the infirmity of the Board's action, if its approval by majority vote of the shareholders is found to have been based on an informed electorate. Cf. Michelson v. Duncan , Del.Supr., 407 A.2d 211 (1979), aff'g in part and rev'g in part , Del.Ch., 386 A.2d…
…or by Signal in the press releases, and to this end I find no misuse of the corporate machinery attributable to Signal as majority shareholder, either direct or indirect, which would require that the vote
…the voting agreement by Outcalt and Shaw." With the assurance that Outcalt and Shaw would irrevocably agree to exercise their majority voting
…were to have managerial powers over the mineral estate in the reservation. Central to this selection was the requirement for "a majority vote
…Group announced that its appointments would be Cullman Sr., Cullman Jr., Barnet, and David Dazinger. These four will represent a majority of the new board as the surviving company will have a seven-member board. See Defs.' Opening Br., Ex. A at 23 (Proxy Statement). : Compl. ¶ 21(i)-(k). : See Defs.'…
No. Under the Model Business Corporation Act a motion passes when more shares are voted in favor than against it. Abstentions are ignored in the numerator and denominator. Delaware's statute treats abstentions as votes against the motion because it requires a majority of shares present.
A common-interest community may exercise powers reasonably necessary to manage common property and administer servitudes by majority vote of the owners or through an association. The Restatement authorizes this collective action unless the declaration or statute provides otherwise.
The plaintiff must allege with particularity facts showing that the determination was not made in good faith or after a reasonable inquiry. A general allegation that the committee lacked independence is insufficient under the Model Business Corporation Act.