AVIS BUDGET GROUP, INC. | Majority Vote at AVIS Budget Group, Inc.

Status
Filed
Previous AGM date
Resolution details
Company ticker
CAR
Lead filer
John Chevedden
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
RESOLVED : Shareholders request that the Board of Directors take each step necessary so that each voting requirement in our charter and bylaws (that is explicit or implicit due to default to state law) that calls for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against applicable proposals, or a simple majority in compliance with applicable laws. 
Supporting statement
This means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws. This proposal includes that Avis Budget shall state in its governing documents that it shall not have any super-majority voting standards, which includes default super-majority voting standards, upon adoption of this proposal. This unified and comprehensive proposal includes adjourning the CAR annual meeting, if CAR fails to obtain the required 80% vote on the day of the annual meeting, for up to 2-weeks to seek more votes with the objective of reaching the 80% shareholder approval requirement for this proposal. In 2025 CAR demonstrated that without adjourning the CAR annual meeting CAR is unable to obtain the 80% approval vote from all shares outstanding that is required. This unified and comprehensive proposal is similar to a unified and comprehensive proposal that was submitted to Netflix and received 83% shareholder support. This proposal does not preclude CAR from using other methods to increase shareholder voting until the 80% shareholder approval is obtained. If CAR had followed the adjournment part of this 2026 proposal at its 2025 annual meeting CAR would now be governed by a majority vote standard. The 2025 majority vote proposal needed an approval vote from 80% of CAR shares outstanding and came so close with more than 76% approval from all shares outstanding. CAR failed to disclose any special effort that it made in 2025 to obtain the few extra votes needed. Some shareholders may feel that CAR disserves to be condemned for not putting forth an extra effort in 2025 to obtain the needed 80% approval from all CAR shares outstanding. In a whole year CAR typically only puts forth 3 items for shareholder vote. Thus when the 2025 incoming votes for this proposal topic were at the 76% mark CAR should have taken this 76% mark seriously and then make an extra effort to obtain the 80% needed. Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. The supermajority voting requirements, like those of CAR, have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to ?What Matters in Corporate Governance? by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School. Supermajority requirements can be used to block proposals supported by most shareowners but opposed by management.

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