What Is A Shareholder Proxy And Why It Matters

by | Aug 9, 2017 | Finance

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Shareholders can own part of a company through shares, which means they have a say in what happens. However, it is usually difficult for them to attend the shareholder meeting and cast their vote. Because of this, the company will send a shareholder proxy ballot, which allows investors to vote and not be present at the annual meeting. Most people who own stock in companies believe it isn’t important to participate in corporate governance. You may not think that you own enough or that your voice matters, but adding it with other shareholders can get the attention you want and influence corporate decisions.

What Is It And Why You Vote It?

It is a requirement that the company hosts an annual meeting for shareholders for SEC reporting companies. Before the meeting, packets are sent out with the most recent annual report and a proxy statement. The proxy statement includes what topics will be covered including board of director nominations and pay packages for the top executives. There may be other management proposals.

When shareholders receive the package, they can fill out the voting ballot and send it back to the transfer agent. In some cases, they may be allowed to vote online or by phone.

Some voting proposals are advisory, which means there is nothing legally binding that states the company must make changes. However, some are binding and will require the corporation to make those changes that were voted for in the ballots.

Your vote in the proxy shareholder meeting matters and is part of the voting process. If you raise a proxy contest, or campaign for a certain proposal, other shareholders may, in turn, vote for you and your initiative, ensuring that change is made.

For more information visit Colonial Stock Transfer Company.

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