Proxy statement

The statement includes: • Voting procedure and information. • Background information about the company's nominated directors including relevant history in the company or industry, positions on other corporate boards, and potential conflicts of interest. • Board compensation. • Executive compensation, including salary, bonus, non-equity compensation, stock awards, options, and deferred compensation. Also, information is included about perks such as personal use of company aircraft, travel, and tax gross-ups. Many companies will also include pre-determined payout packages for if an executive leaves the company. • Who is on the audit committee, as well as a breakdown of audit and non-audit fees paid to the auditor. == Regulation ==

US regulation In the US, Regulation 14A is the set of rules around proxy solicitations and Schedule 14A sets rules for the proxy statement. A proxy statement is required of a firm when soliciting shareholder votes.'''' There has been some controversy over "proxy access" which is a method to allow certain shareholders to nominate candidates which appear on the proxy statement. Historically, only the nominating board can place candidates on the proxy statement. Activist investors typically had mailed their own ballots when running competing candidates. The United States Dodd–Frank Wall Street Reform and Consumer Protection Act specifically allowed the SEC to rule on this issue. In 2010, the SEC passed a rule which allowed certain shareholders to place candidates on the proxy statement; however, in Business Roundtable v. SEC'' the rule was struck down by the United States Court of Appeals for the District of Columbia Circuit in 2011. Beginning in 2015, proxy access rules began to spread driven by initiatives from major institutional investors, and as of 2018, 71% of S&P 500 companies had a proxy access rule. == Voting process ==

Proxy advisory In many cases, shareholder votes—particularly institutional shareholder votes—are determined by proxy firms which advise the shareholders. In July 2010, the SEC announced that it was seeking public comment on the efficiency of the proxy system.'''''' Voting is important for corporate governance, but many of the votes are cast by institutional shareholders, including many who are passive investors. These organizations use proxy advisory firms, notably including Institutional Shareholder Services and Glass Lewis, to help them vote their shares in a responsible way. Broker voting Traditionally, broker-dealers have been permitted to vote for "routine" proposals on behalf of their shareholders if the shareholders do not return the proxy statement, and this practice has been controversial. In 2006 the NYSE Proxy Working Group recommended that the rules, e.g. Rule 452, be modified so that uncontested director elections were not considered routine and the SEC approved the rule on July 1, 2009. Broker voting is, for the most part, governed by Rule 452. Electronic voting Prior to 2009, companies in the United States were required to send proxy materials via postal mail, but following a rule change effective in 2009, companies, can handle voting electronically. According to one study, about 31% of voting happened electronically in 2019. Broadridge is another major vendor. == Retail investors ==

When retail investors own stock via investment funds such as mutual funds, the investor cannot vote the shares as the investment manager has that power. == See also ==