Proxy statement definition
/What is a 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). Proxy statements must be filed with the SEC before they are issued to shareholders. These statements are electronically filed as Form DEF 14A, and are available for general viewing through the SEC's on-line EDGAR database.
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Public Company Accounting and Finance
Contents of a Proxy Statement
Proxy statements contain the following information:
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, salaries, stock options, deferred compensation, use of company assets, 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 external auditors
Advantages of Proxy Statements
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.