|EcommerceBytes-NewsFlash, Number 2575 - June 29, 2011 - ISSN 1539-5065 2 of 3|
eBay's Board of Directors formally eliminated a supermajority voting requirement in its bylaws after stockholders voted in April to eliminate it. The Board's approval to amend eBay's bylaws, effective immediately, modifies the voting standard required for stockholders to amend eBay's bylaws from 66-2/3% to a majority of eBay's outstanding voting stock. (See eBay's SEC filing for details.)
As we reported in May, the vote came over the opposition of eBay's board of directors. Under the supermajority requirement, bylaw amendments could be adopted only with a 66 and two-thirds percent vote of all outstanding shares; going forward, eBay will only require a simple majority of votes cast to amend its bylaws.
This could set the stage for more investor activism by lowering the threshold required to implement corporate governance changes.
In addition, eBay announced on Tuesday that the Board's Corporate Governance & Nominating Committee recommended that a proposal to declassify the Board be submitted to stockholders at eBay's 2012 annual meeting. This is also a shareholder-friendly proposal.
Currently eBay directors are divided into three classes with staggered multi-year terms. The majority of eBay's Directors have served 6 or more years - two have served 12 years or more (not including Pierre Omidyar, who founded the company).
According to Investopedia, opponents to the classified structure argue that the system breeds board member complacency and forces directors to develop close relations with management.
Directors Continuing in Office Until the 2011 Annual Meeting
Directors Continuing in Office until the 2012 Annual Meeting
Directors Continuing in Office until the 2013 Annual Meeting
More information about eBay's corporate governance can be found on this page.
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About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to email@example.com.
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