Marsh & McLennan Companies Inc. said it would now elect its directors by majority vote, and any director not receiving a majority vote would have to resign.
The New York-based company's new by-laws become effective immediately and will apply to MMC's annual meeting of stockholders in May 2007.
MMC said that in an uncontested election of directors, a director nominee will be elected or re-elected only if the number of votes cast “for” exceeds the number of votes cast “against” the nominee. Previously, the election was by plurality.
In contested elections, where there are more nominees than board seats to be filled, directors will continue to be elected by a plurality of the votes cast.
To support the change, MMC said the board of directors amended MMC's guidelines for corporate governance. Under the amended guidelines, an incumbent director who fails to receive a majority vote when standing for re-election must offer to resign. The board will determine within 90 days whether to accept the resignation and its decision will be publicly disclosed.
The amended versions of MMC's by-laws and guidelines for corporate governance are available at www.mmc.com.
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