A reporting company must comply with the SEC's proxy rules whenever its management submits proposals to shareholders that will be subject to a shareholder vote, usually at a shareholders’ meeting. These rules get their name from the common practice of management asking shareholders to provide them with a document called a “proxy card” granting authority to vote the shareholders’ shares at the meeting. The proxy rules require the company to provide certain disclosures in a proxy statement to its shareholders, together with a proxy card in a specified format, when soliciting authority to vote the shareholders’ shares. Proxy statements describe matters up for shareholder vote, and include management and executive compensation information if the shareholders are voting for the election of directors.
If shareholders will take action on a matter but management is not soliciting proxies, the company must provide shareholders with an information statement that is similar to a proxy statement.
The proxy rules also require the company to send an annual report to shareholders if the shareholders are voting for directors. The proxy rules also govern when your company must provide shareholder lists to investors and when it must include a proposal from a shareholder in its proxy statement or information statement.
Additional Information and Resources
- Spotlight on Proxy Matters
- Compliance Guide: Shareholder Approval of Executive Compensation and Golden Parachute Compensation
- Compliance Guide: Proxy Disclosure Enhancements
- Compliance Guide: Internet Availability of Proxy Materials
- Compliance Guide: Facilitating Shareholder Director Nominations
- Compliance Guide: Electronic Shareholder Forums
- Staff Guidance: Compliance and Disclosure Interpretations
- Press Release: SEC Proposes Amendments to Require Use of Universal Proxy Cards