Chapter 11Governmental Shareholders

Section § 6900

Explanation

If a government entity owns stock in a company and there's a vote on allowing cumulative voting for the board of directors, it must vote in favor. "Governmental body" includes any level of state government, including counties, cities, and public agencies.

Whenever any governmental body is a shareholder of any corporation, and a resolution is before the shareholders which will permit or authorize cumulative voting for directors, such governmental body shall vote its shares to permit or authorize cumulative voting.
As used in this section the term “governmental body” means the state, and any office, department, division, bureau, board, commission or agency thereof, and all counties, cities, districts, public authorities, public agencies and other political subdivisions or public corporations in the state.
government shareholder corporate voting cumulative voting board of directors government stock ownership corporation voting rights public agency voting political subdivision state entities as shareholders resolution for cumulative voting government investment in corporations state-owned shares public corporations shareholder voting government influence in corporations
(Added by Stats. 1975, Ch. 487.)

Section § 6901

Explanation

This law requires that every state agency in California that owns common stock must actively vote on proxies when they are returned to a corporation. However, state agencies can choose to abstain from voting on specific corporate or shareholder proposals, as long as they inform the corporation in writing about their decision to abstain.

The term 'state agency' here includes the state government itself, the University of California, and any associated departments, divisions, boards, or retirement systems.

Notwithstanding any other provision of the law, every state agency owning common stock shall, when returning proxies to a corporation, vote each proxy that is returned to the corporation. Nothing in this section shall prohibit a state agency owning common stock from abstaining on a corporate or shareholder proposal and notifying the corporation in writing of the state agency’s desire to abstain on a corporate or shareholder proposal.
As used in this section “state agency” includes the state, the University of California, and any office, department, division, bureau, board, commission, agency, or pension or retirement system thereof.
state agency proxies common stock voting proxy voting requirements abstaining from proxy votes corporate proposals shareholder proposals University of California state-owned stocks voting obligations shareholder resolutions proxy communication agency voting rights
(Amended by Stats. 1981, Ch. 714, Sec. 163.)