cumulative voting investment & finance definition

A voting system that lets shareholders give all their votes to one candidate for the board of directors, which gives minority shareholders more power. In contrast, in regular or statutory voting, shareholders may not cast more than one vote per share to any single nominee. For example, in an election for four directors, a shareholder with 500 shares has one vote per share. Under the regular method, the shareholder could vote a maximum of 500 shares for each of four candidates. Under cumulative voting, however, the shareholder could choose to vote all 2,000 votes for one candidate, 1,000 each to two candidates, or otherwise divide his or her votes.