Counting The Vote When There Are Three Choices

Section 951 of the Dodd-Frank Act requires companies that are subject to the SEC’s proxy rules to include in their proxy statements “a separate resolution subject to shareholder vote” to determine whether a shareholder vote on executive compensation will occur every 1, 2, or 3 years. However, the Dodd-Frank Act specifically declares that this vote shall not be binding on the companies or their boards of directors.

This leads to the question of how companies will describe the vote required with respect to these resolutions. See Item 21 of Schedule 14A. The Dodd-Frank Act and the SEC’s proposed rule do not specify a particular voting rule.

Recently, I came across this description in a proxy statement...

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