A big investor in Banc of California is proposing that the Irvine company adopt majority rather than plurality voting for the election of directors.
PL Capital, which is well known for being an activist investor, submitted a nonbinding proposal for shareholders to consider during the $9.6 billion-asset company's annual meeting. The proposal requests that the board take "the actions necessary" to switch to majority voting, arguing that a plurality standard lets directors be elected even if a majority of shares vote against a nominee.
"A majority voting standard would give Banc of California stockholders a real say in the election of directors," Richard Lashley, a PL Capital principal, said in a press release issued last week. "In our view, and in the view of most corporate governance experts, the majority voting standard is the best method to elect corporate directors."
More than 80% of companies in the S&P 500 index use majority voting, the release claimed.
PL Capital, one of Banc of California's biggest shareholders, with a 5.9% stake, has battled it in the past. In December it requested that the company's lead director disclose details about Chairman and Chief Executive Steven Sugarman's involvement with an investment fund that violated securities laws. In June 2014, Lashley sent a letter to Sugarman that described a heated exchange between the two men at an investor meeting.
Banc of California's annual meeting is set for Friday.