Oakland, Md.-based First United Corp.'s board on Dec. 16 agreed to use plurality voting for its 2020 annual shareholders meeting, following activist investor Driver Management Co. LLC's call to amend the company's bylaws to institute the change.
Under plurality voting, the director who receives the most votes will win the board seat. Under the company's existing majority election process, if no directors win a majority of votes, the incumbent director keeps his or her seat.
Driver Management wrote in a Dec. 13 letter to the board that a plurality voting standard in a proxy contest ensures that the director nominees receiving the most votes are elected to the board, as opposed to a majority voting standard provided under the company's bylaws. The shareholder said a majority voting standard is "widely viewed as a potential entrenchment device for boards."
First United's board approved the use of plurality voting for the 2020 meeting, but it did not move to amend the company's bylaws.
Driver Management recently nominated three candidates to First United's board, the latest development in its campaign to push the company to sell. Other shareholders have also called on the company to seek a buyer.