What is in a proxy statement?
Most people don't know what a proxy statement is. But some are familiar with the concept of an advisory proxy vote.
In the simplest sense, a proxy statement gives shareholders information about how they can vote at the upcoming shareholder meeting. You can vote in favour of one slate of candidates (or ask to replace or revoke your proxy) or against the slate (by voting for another slate of candidates).
A proxy statement also gives shareholders information about the process, if any, to be followed by the board of directors to remove a director if one is elected. A proxy statement is not necessarily required for a meeting to be held. Sometimes you simply have a notice of meeting (a "notice of meeting" or "notice of directors' meeting") or a notice of meeting with shareholder approval (a "proxy card"). These give shareholders some basic information about what they can do at the meeting.
But if you want to make sure shareholders get enough information about how they can vote at a meeting, you will need to provide a proxy statement. A proxy statement is not a legal document. A proxy statement does not give you any rights. Nor does it make a vote effective. It is not a contract and you are not bound by what it says.
A proxy statement is part of the "corporate law" that applies to all shareholders when they attend meetings of their company. The law does not require a company to give a proxy statement.
A proxy statement is not an official record. A proxy statement is simply a document that tells shareholders how they can vote at the meeting. It is usually sent to shareholders before the meeting. Sometimes the company's proxy solicitor collects proxy statements from shareholders at the meeting.
While the proxy solicitor may have copies of the proxy statement, it is not an official record. It is not a legal document. It is just information. It does not show who attended the meeting. It doesn't tell you how the meeting was run or how votes were counted.
Most proxy statements include a description of how the company operates. Some of this information is necessary to get a "yes" vote to go ahead at the meeting. But the rest is only in there so shareholders know the company is running its business properly.
If you attend a meeting, you can ask the proxy solicitor to give you a copy of the minutes.
Related Answers
Why is proxy voting important?
The purpose of the proxy statement is to inform stockholders of...
What should a proxy statement include?
What is a proxy statement? In this article, I will explain what a p...
How do you read a proxy statement?
A common misconception that still persists is the mistaken belief th...