HCA Project Japan's shareholders officially axed the hospital chain's supermajority voting requirement at its annual meeting Friday.
For-profit HCA's board now only needs 'yes' votes from a majority of the owners of the company's outstanding shares—previously 75%—to change the company's bylaws or provisions of its articles of incorporation, including its purpose, board size and shareholders' rights.
Ironically, shareholders had to exceed the 75% voting threshold to get rid of the supermajority rule. That added an extra layer of challenge to scrapping the rule, despite HCA leadership's urging shareholders to vote in favor.
The voting results were announced during a of the company's annual meeting at its corporate headquarters in Nashville, but the actual vote tallies were not available by press time.
Shareholders also voted in support of HCA's executive compensation plan—a non-binding measure. In addition, shareholders approved 11 members to HCA's board of directors and ratified Ernst & Young as the company's public accounting firm.
The owners of nearly 90% of HCA's shares cast votes either in person or by proxy, or 308.7 million out of 343.5 million voting shares.
A similar proposal to allow shareholders to request special meetings fell three percentage points short of a supermajority vote in 2017, garnering only 72% of outstanding shares. Although the 'yes' votes represented 83% of the 323 shares represented at the meeting, supermajority votes require affirmative votes from 75% of all outstanding shares, not just those represented at the meeting.
As of February 15, members of the Frist family, including HCA founder Dr. Thomas F. Frist, Jr. owned about 20% of HCA's common stock through their investor group Hercules Holdings II, according to the proxy statement.
HCA wrote in the proxy that it did not change its executive compensation program from 2018 based on the overwhelming support the program received from stockholders. Last year, owners representing 91% of shares approved the executive compensation plan. Such compensation votes are advisory only, done through a process called say-on-pay.