A non-voting stock may vote in the following acts, except in case of which act?

• A. Merger or Consolidation
• B. Approval of the compensation of directors
• C. Increase or decrease in capital stock
• D. Sale, lease, exchange, mortgage, pledge, or other disposition of all or substantially all of corporate property.

Answer: (B)

Non-voting stock has rights limited to fundamental changes that affect the company’s ownership or structure. These actions require a vote because they alter who controls the company or how much of its capital is outstanding. That’s why mergers or consolidations, increases or decreases in capital stock, and the sale or other disposition of substantially all of the company’s property are typically matters on which stockholders—among them non-voting holders—have a say. The compensation of directors, on the other hand, is a governance decision handling remuneration rather than a structural change; it is not treated as a fundamental act requiring stockholder approval from non-voting shares. So the act that is not voted on by non-voting stock is the approval of directors’ compensation.