What is a shareholder voting agreement?
Shareholders may choose to pool their votes for a particular goal. Voting agreements may specify that the involved shareholders will vote their shares together or cooperatively. Courts usually uphold shareholder voting agreements as long as they relate to issues upon which shareholders can vote. Example: Connie and Val enter into a shareholder agreement that they will never vote for another shareholder, Arlene, for a seat on the board of directors. They also agree that if they are outvoted, they will try to convince the company to pay Arlene less than the other directors. The first part of the agreement is valid because it relates to an issue on which Connie and Val can vote. The second portion cannot be enforced as a shareholder voting agreement because Arlene’s pay is within the discretion of the board of directors and will not come up for shareholder vote. Voting pools may specify exactly how the participating shares should be voted, or they may allow for negotiation and agreement f
