GM Shareholders Approve Majority Voting Proposal

June 7, 2006 ( - General Motors Corp. (GM) shareholders approved two proposals on Tuesday that would give them more influence in the way directors are elected.

The New York Times reports that one proposal would require board members to receive a majority of votes cast by shareholders to be re-elected and another proposal would permit shareholders to pool their shares for a single candidate or a few candidates, rather than the full slate. In voting for the proposals, shareholders defied GM’s recommendations, reflecting investors’ dissatisfaction with the troubled company’s leadership.

In its proxy statement, GM said voting “yes” to the majority vote proposal would be premature and redundant. “GM has a strong corporate governance process designed to identify and propose director nominees who will serve the best interests of GM and its stockholders,” the proxy statement said, according to the Times. The company also said that a possible change to the law in Delaware, where GM is incorporated, would require a majority, making the shareholder proposal irrelevant.

Majority voting has received significant attention from shareholders recently (See Running the Fund: Majority Rules? ). That was the one proxy proposal that passed at a recent Home Depot shareholder meeting (See Corporate Excessive Pay Activists Win Strong Home Depot Support ), and, according to the Times, Exxon shareholders approved a similar resolution last month.

Two other proposals were defeated by GM shareholders; one calling for company executives to return “all unearned incentive bonuses,” and another to split the positions of chairman and chief executive, another issue receiving increasing attention from shareholders (See Board Members Vote to Split CEO and Chairman Roles ).

Because all the resolutions were advisory, chief executive Rick Wagoner said the board would discuss whether to carry them out.