Shareholders can initiate the process of removing a CEO by following the procedures outlined in the company’s bylaws and corporate governance guidelines. Typically, this involves:
1. Gathering support: Shareholders need to rally support from other shareholders who are dissatisfied with the CEO’s performance. This may involve contacting institutional investors, organizing proxy campaigns, or leveraging shareholder advocacy groups.
2. Proposal submission: Shareholders can submit a proposal for the removal of the CEO to be included in the agenda of the company’s annual general meeting or a special shareholders’ meeting. This proposal should outline the reasons for removal and suggest a suitable replacement.
3. Proxy voting: Shareholders can vote on the proposal through proxy voting, either in person at the meeting or by submitting their votes remotely. Proxy advisory firms may provide recommendations to institutional investors on how to vote on the proposal.
4. Majority vote: The proposal to remove the CEO typically requires a majority vote of shareholders present or represented at the meeting for approval. If the proposal is approved, the board of directors may then proceed with the CEO’s removal and search for a replacement