SIE (Securities Industry Essentials) 2025 – 400 Free Practice Questions to Pass the Exam!

Statutory voting is a type of voting system where each share of common stock gives the shareholder one vote per vacancy on the board of directors. This means that for each open seat on the board, the shareholder is entitled to one vote per share they own. This is different from other types of voting systems, such as cumulative voting, where shareholders can use all of their votes for one candidate or split them among multiple candidates.

Option B, stock options available, is incorrect because stock options are not the same as stock ownership. Stock options give the holder the right to purchase stock at a future date, but they do not represent actual ownership of the stock.

Option C, total shares issued by the company, is also incorrect because this number includes all types of stock, not just common stock. Under statutory voting, only common stockholders have voting rights, so only their shares would be considered.

Option D, board members currently serving, is also incorrect because this number does not have a direct correlation to the number of vacancies on the board. Some board members may serve for longer terms or may not be up for re-election at the current time.

In conclusion, under a system of statutory voting, a common stockholder's voting power is directly tied to the