What is Split Voting? Weighted and Cumulative Voting Explained
How split voting works on the Lumi Global platform, with examples of weighted and cumulative voting.
Split voting lets a voter divide their votes across different choices on the same resolution, rather than casting them all one way. For example, a shareholder with 1,000 shares could cast 600 votes For a resolution and 400 votes Against.
On the Lumi Global platform, split voting is an optional setting. When it is turned on, the meeting can be set up with one of five voting options, explained below.
Why use split voting?
Split voting is useful when one voter represents several people with different instructions. For example, a nominee, custodian or proxy holder may hold shares on behalf of many underlying investors. Some of those investors may want to vote For a resolution and others Against. Split voting lets the nominee reflect all of those instructions in a single vote.
The five split voting options
1. One person, one vote (1:1)
Each person gets one vote, regardless of how many shares they own.
Example: a shareholder with 10 shares and a shareholder with 10,000 shares each cast one vote.
2. Weighted with votes
Voting power depends on the number of shares owned. This is known as weighted voting.
Example: a shareholder with 1,000 shares casts 1,000 votes.
3. Weighted, optional split
Voting power is weighted by shares. Each shareholder can choose whether to split their votes across the voting choices or cast them all one way.
Example: a shareholder with 1,000 shares can cast all 1,000 votes For, or split them as 700 For and 300 Against.
4. Weighted, enforced split
Voting power is weighted by shares, and shareholders must split their votes across the voting choices.
Example: a shareholder with 1,000 shares divides them across the choices, such as 500 For, 300 Against and 200 Abstain.
5. Weighted, cumulative split
Voting power is weighted by shares. Shareholders must split their votes across either a single choice or multiple choices within a question. This option supports cumulative voting.
What is cumulative voting?
Cumulative voting is a method most often used to elect a board of directors when there are several seats to fill. Each shareholder's votes are multiplied by the number of seats up for election. The shareholder can then put all of those votes on one candidate or spread them across several candidates.
Cumulative voting example
A company is electing 3 directors and a shareholder owns 100 shares.
- Cumulative voting: the shareholder has 300 votes (100 shares x 3 seats). They can give all 300 to one candidate, or split them, for example 200 to one candidate and 100 to another.
- Statutory (straight) voting: the shareholder can cast up to 100 votes for each of the 3 seats, but cannot move votes from one seat to another.
Cumulative voting formula
Total votes = number of shares owned x number of seats up for election
Statutory vs cumulative voting
- Statutory voting (also called straight voting): shareholders cast one vote per share for each seat. A majority shareholder can decide the outcome of every seat.
- Cumulative voting: shareholders can concentrate all their votes on one or a few candidates. This gives minority shareholders a better chance of electing at least one director to the board.
Frequently asked questions
Is split voting the same as cumulative voting?
No. Split voting is the general ability to divide your votes across choices. Cumulative voting is one type of split voting, where votes are multiplied by the number of seats and can be concentrated on one candidate or spread across several.
What is weighted voting?
Weighted voting means each voter's voting power is based on the number of shares they own, rather than every voter having one vote.
What does "one person, one vote" mean?
Every voter gets one vote, regardless of how many shares they hold.
Is split voting turned on automatically?
No. Split voting is an optional setting that can be turned on for a meeting.
Why does cumulative voting help minority shareholders?
Minority shareholders can put all their votes on a single candidate, which makes it more likely they can elect at least one director, even if they hold fewer shares than the majority.