Proxy Statement

A document publicly traded companies provide to prepare shareholders with vital information

Author: Elliot Meade
Elliot Meade
Elliot Meade
Private Equity | Investment Banking

Elliot currently works as a Private Equity Associate at Greenridge Investment Partners, a middle market fund based in Austin, TX. He was previously an Analyst in Piper Jaffray's Leveraged Finance group, working across all industry verticals on LBOs, acquisition financings, refinancings, and recapitalizations. Prior to Piper Jaffray, he spent 2 years at Citi in the Leveraged Finance Credit Portfolio group focused on origination and ongoing credit monitoring of outstanding loans and was also a member of the Columbia recruiting committee for the Investment Banking Division for incoming summer and full-time analysts.

Elliot has a Bachelor of Arts in Business Management from Columbia University.

Reviewed By: Andy Yan
Andy Yan
Andy Yan
Investment Banking | Corporate Development

Before deciding to pursue his MBA, Andy previously spent two years at Credit Suisse in Investment Banking, primarily working on M&A and IPO transactions. Prior to joining Credit Suisse, Andy was a Business Analyst Intern for Capital One and worked as an associate for Cambridge Realty Capital Companies.

Andy graduated from University of Chicago with a Bachelor of Arts in Economics and Statistics and is currently an MBA candidate at The University of Chicago Booth School of Business with a concentration in Analytical Finance.

Last Updated:November 28, 2023

What Is A Proxy Statement?

A proxy statement is a document publicly traded companies provide to prepare shareholders with vital information to make informed decisions based on topics or issues being discussed and addressed in shareholder meetings.

The Securities and Exchange Commission (SEC) requires all publicly traded companies to provide these statements ahead of any US annual or special stockholder meetings. This claim can be used to evaluate management compensation and potential conflicts of interest with auditors.

Let’s look into the contents of this document:

What is included in a Proxy Statement? These documents are filed with the SEC’s DEF 14 A form, and more information and requirements of the form can be found in the SEC’s digital database EDGAR.

These documents must have all the information shareholders need to make decisions in these meetings.

The information must include:

  1. The company’s voting procedure.
  2. Nominated candidates for its board of directors.
  3. Compensation of directors and executives (total compensation package including salaries, bonuses, and equity awards).
  4. Work-related expenses (company travel, material expenses used by executives).
  5. Background information on the directors proposed by the company, including relevant employment or industry history, memberships on other corporate boards, and any conflicts of interest.
  6. Board remuneration.
  7. Many businesses also have pre-planned compensation plans if an executive leaves the organization.
  8. A breakdown of the audit and non-audit fees paid to the auditor and information about who is on the audit committee.

In many shareholder meetings, the election of Directors and other Executives is the most critical task discussed.

During these meetings, the proxy statement is populated with extensive information about the experience, technical background, career earnings, and other professional information to prepare shareholders to submit informed votes for whom they feel most confident in running the company.

Key Takeaways

  • The Securities and Exchange Commission must receive proxy statements from publicly traded corporations.
  • The proxy statement is submitted before an annual meeting whenever a firm requests shareholder votes.
  • The form DEF 14A proxy statement lists new board of director nominees, proposed executive pay and compensation, and any additional details a shareholder would need to make a well-informed vote.
  • Shareholders can use proxy statements to evaluate the credentials and pay of essential company management team members and the board of directors.
  • A proxy statement differs from a proxy vote, in which a shareholder authorizes another person to vote in the shareholder’s place.

What is Proxy Voting?

A proxy vote is a form of delegation that shareholders or firms give to a representative when shareholders cannot physically attend a meeting or would rather trust the representative as more knowledgeable when addressing an issue.

This representative, known as a proxy, may be more informed about a particular issue based on professional background or experience to make a more well-informed vote.

Before annual meetings, eligible shareholders will receive this statement describing all the topics up for voting. Since most shareholders cannot attend the meeting, they will designate their vote to the proxy to decide for them or carry out the vote on their behalf. 

Proxy Agreement

A proxy agreement is a proxy's written consent to vote and act on behalf of shareholders during annual or special meetings.

These agreements are not filled with the SEC but are discussed with shareholders and vary from company to company based on the importance of the decisions being made.

Proxy agreements are usually in place when the shareholder lacks field-specific knowledge to decide for the company. In addition to the traditional paper form, proxies can be provided over the phone and by email.

Unless a different timeframe is stated in the proxy form, a proxy is valid for 11 months from the date signed. A proxy agreement is only valid for up to three years after it was executed.


Most proxy agreements are legal documents and can be used in legal suits. A common example of the rightfulness of these legally binding proxy documents is in the healthcare and pharmaceutical industries.

Suppose you become incapacitated or unable to express your intentions. In that case, a Health Care Proxy is a legally enforceable document that designates another person as your Agent and authorizes them to make medical or healthcare decisions on your behalf.

Proxy Fights or Proxy Battles

Sometimes, proxy statements and proxy votes lead to unique situations, such as proxy fights (or proxy battles), where groups of shareholders rally together to win a specific vote.

If shareholders disagree with a particular management decision, they may appeal to the corporation's board of directors.

However, suppose board members are unwilling to listen. In that case, angry shareholders may try to convince other shareholders to allow them to use their proxy votes to elect new board members who will be more amenable to putting the shareholders' suggestions into action.

The proxy document will also include a more detailed description of the potential purchase if the proxy battle involves the sale of the company.

A proxy solicitor from a third party typically contacts shareholders on behalf of the acquiring firm and produces a list of stakeholders.

The proxy solicitor may speak with each stakeholder one-on-one and present the acquirer's argument in an additional effort to sway their voting decisions.

This usually happens when there is a corporate takeover when an acquiring group or group of unsatisfied employees convince shareholders to vote out all of the company’s executive management or vote for policies that the employees support. 

Proxy Statement Examples

A company must file this document with the SEC 10 days before handing it to the shareholders.

Every time management makes recommendations to shareholders that they will vote on, typically at a shareholders' meeting, a reporting business must abide by the SEC's proxy guidelines.

The practice of management requesting a "proxy card" from shareholders, which gives them the right to vote for the shareholders' shares at the meeting, gave rise to these rules, known as such.

When requesting permission to vote for the shareholders' shares, the corporation is required by the proxy rules to make certain disclosures in a statement to its shareholders with a proxy card in a specific format.

If the shareholders vote to elect directors, the statement will describe the issues and include management and executive compensation information.

The corporation must give shareholders an information statement similar to a proxy document if shareholders vote for the topic, but management is not soliciting proxies.

If a company cannot file a statement on time, it must file SEC Form 12b-25, also known as the Notification of Late Filing.

This form covers more than just filings of proxy documents but ensures that the company does not have to pay fees for missing the file’s due date and must include the reason why the document is late.

Here are some examples of companies’ statements sent out to investors.

Most publicly traded companies post their documents and information about their annual meeting on their investor relations websites:

  1. Apple Annual Meeting of Shareholders (2023)
  2. Johnson & Johnson Proxy Statement (2022)
  3. Home Depot Proxy Statement (2022)

Researched and authored by Akshaj Nair | LinkedIn

Reviewed and edited by Parul GuptaLinkedIn

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