CVS Corporation Approves By-law Change for Majority Voting of Directors
WOONSOCKET, R.I.--(BUSINESS WIRE)--Feb. 5, 2007--CVS Corporation announced today that its Board of Directors has amended the company's by-laws to adopt a majority vote standard for the election of directors. The new standard became effective on February 2nd and will apply to all future elections of directors by stockholders. This new standard, which requires each director to receive a majority of the votes cast with respect to that director's election, further underscores CVS' focus on corporate governance and provides for a greater level of accountability of directors to stockholders.
Previously, directors were elected under a plurality vote standard, meaning that candidates receiving the most votes would win without regard to whether those votes constituted a majority of the shares voting at the meeting. Plurality voting still will apply in contested elections, where the number of nominees for any election of directors exceeds the number of directors to be elected.
In the event a candidate for director does not receive a majority vote, the company's by-laws require that person to submit his or her resignation to the board, who must decide no later than its next regularly scheduled meeting whether to accept it.
Under Delaware law, this by-law provision cannot be repealed or amended without the approval of shareholders.
"Adopting a majority vote standard demonstrates our commitment to sound corporate governance," said Tom Ryan, Chairman, President and CEO of CVS. "The decision to institute this new standard places CVS firmly among the leaders in corporate governance principles, a position which we believe is fundamental to creating long-term value for our shareholders."
Additional information on CVS Corporation's board of directors and corporate governance guidelines are available within the Corporate Governance section of the Company's Investor Relations website at http://investor.cvs.com.