Summary
Realty Income Corporation (O) filed an 8-K on February 13, 2012, detailing an amendment to its corporate bylaws, effective February 7, 2012. This amendment shifts the director election standard in uncontested director elections from a plurality vote to a majority of the votes cast. This means that for directors who are not facing opposition, they must now receive more 'for' votes than 'against' votes to be elected. This change enhances corporate governance by giving shareholders more direct say in director appointments. The company has also adopted a policy requiring incumbent directors who fail to receive a majority vote in an uncontested election to offer their resignation. The Board will then review and decide on accepting or rejecting the resignation, with public disclosure of the decision and reasoning.
Key Highlights
- 1Realty Income Corporation amended its bylaws on February 7, 2012.
- 2The amendment applies to the election of directors.
- 3In uncontested director elections, directors will now be elected by a majority of the votes cast, rather than a plurality.
- 4Plurality voting remains in effect for contested elections.
- 5A new policy mandates that incumbent directors failing to secure majority support in uncontested elections must offer to resign.
- 6The Board's Nominating/Corporate Governance Committee will decide on accepting or rejecting tendered resignations within 90 days.
- 7The company will publicly disclose the committee's decision and rationale for director resignation acceptances/rejections.