Proxy statement

A proxy statement is a document that publicly-held companies are required to send to their shareholders prior to shareholder meetings, so that shareholders have sufficient information to vote on issues brought before them. The information contained within a proxy statement is mandated by the Securities and Exchange Commission (SEC), and includes the following items:

  • Background information about people being submitted for a vote to be members of the board of directors
  • Compensation of the board of directors (including bonuses, options, deferred compensation, and so forth)
  • Background information concerning all issues being brought to shareholders for a vote
  • Security ownership of directors and officers
  • Related party transactions
  • Fees paid to the company's outside auditors

Proxy statements must be filed with the SEC before they are issued to shareholders. These statements are electronically filed, and are available for general viewing through the SEC's on-line EDGAR database.

Proxy statements are useful for much more than shareholder votes. They can also be used to examine the qualifications of company leaders, whether their compensation is unusual in comparison to peers, and whether there are unusual dealings between these individuals and the company.

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Public Company Accounting & Finance