How does the new majority voting standard affect director elections?

In uncontested director elections, nominees must now receive more 'for' votes than 'against' votes. Previously, only a plurality (more votes than any other candidate) was required. Abstentions and broker non-votes will not impact the outcome under the majority standard.

What happens if a director does not receive a majority of votes in an uncontested election?

If an incumbent director fails to receive a majority of the votes cast in an uncontested election, they must promptly tender their resignation to the Board. The Board, after review by the Nominating and Corporate Governance Committee, will decide whether to accept the resignation within 90 days.

Does this change apply to all director elections?

No, the majority voting standard applies specifically to uncontested director elections. In contested elections, where the number of nominees exceeds the number of directors to be elected, the plurality voting standard will continue to apply.

HCA 8-K: Corporate Changes

Q: What is the primary change being reported in this 8-K filing?

The primary change is the amendment to HCA Holdings, Inc.'s bylaws to adopt a majority voting standard for uncontested director elections and to implement a director resignation process if a majority vote is not achieved.

Summary

HCA Healthcare, Inc. (HCA) filed an 8-K report on February 19, 2016, announcing significant amendments to its corporate governance. The Board of Directors adopted an amendment and restatement of the company's bylaws, transitioning from a plurality voting standard to a majority voting standard for uncontested director elections. This change mandates that director nominees must receive a majority of the votes cast for election, rather than simply more votes than any other candidate. Furthermore, the updated bylaws introduce a director resignation process. If an incumbent director fails to receive a majority of votes cast in an uncontested election, they are required to promptly tender their resignation to the Board. The Nominating and Corporate Governance Committee will then review the resignation, and the Board will make a final decision within ninety days, publicly disclosing its rationale. This move is designed to enhance accountability and shareholder influence in director elections, particularly in situations where a director might lack broad support despite running unopposed.

Key Highlights

1HCA Holdings, Inc. adopted a majority voting standard for uncontested director elections, replacing the previous plurality standard.
2Director nominees must now receive a majority of votes cast ('for' votes exceeding 'against' votes) to be elected in uncontested elections.
3Abstentions and broker non-votes will not be counted towards the outcome of director elections under the new majority standard.
4Incumbent directors failing to achieve a majority vote in uncontested elections are required to tender their resignation.
5The Board's Nominating and Corporate Governance Committee will review tendered resignations from directors who fail to receive majority support.
6The Board has 90 days to publicly disclose its decision and rationale regarding a tendered resignation after election certification.
7Contested director elections (more nominees than open seats) will continue to be governed by a plurality voting standard.

HCA Healthcare, Inc. 8-K Report, Bylaw Amendment (Feb 19, 2016)

Summary

Key Highlights

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