The board of directors of rent-to-own company Rent-A-Center Inc. is seeking to amend the company's certificate of incorporation to allow directors to stand for election on an annual basis, according to a Dec. 21 company release.
The company's directors are currently categorized into three classes, with members of each category serving staggered three-year terms so that one-third of the board seats are up for election annually.
The directors are proposing to declassify the board, a process that will have each director tender their resignation and subsequently be reappointed by the remaining board members. That step would only take place if the shareholders first agree to amend the company's certificate of incorporation.
The directors have voted to submit the proposal to the Texas-based company's shareholders at their 2018 annual meeting on June 5, 2018. If approved, the directors will serve a one-year term after the meeting and will stand for election annually beginning after the 2019 shareholders' meeting.
Engaged Capital LLC, Rent-A-Center's largest stockholder, said it fully supports the proposal.