Proxy solicitation

Proxy solicitation
See also
Share register Shareholder register Stock ledger Articles of amendment Written resolution Sub broker Appointment of directors Share certificate Extraordinary general meeting

Proxy solicitation - A proxy is a writing signed by a shareholder authorizing a named person to vote his shares of stock at a specified shareholders' meeting. To ensure that shareholders have adequate information upon which to vote and opportunity to participate effectively at shareholder meetings, the 1934 Act regulates the proxy solicitation.

In corporate settings a proxy solicitation is usually accompanied by a proxy statement. Proxy solicitation is taking by voting - virtually indispensable for public corporations when shareholder voting takes place.

Information needed in the proxy solicitation

The rule defines a number of information types to include in the solicitation, including:

• Information about where and when the meeting will be held
• The date by which shareholders must submit their proposals for inclusion in the solicitation
• The method for revoking proxies, if allowed
• Any rights of appraisal for dissenters
• Any interests that the company's directors and officers may have in items being voted upon
• A summarization of the voting securities outstanding and who owns them
• The date of record that is used to determine which shareholders can vote
• Any relationship that directors may have with the company
• The compensation paid to officers and directors
• The amounts paid to the company's auditors for auditing and other services
• A description of any benefit, bonus, pension, or similar plan to be voted upon
• A description of any securities that will be authorized to be issued
• A description of any property that the company plans to dispose of or acquire
• A description of any proposed changes to the company's articles of incorporation

Proxy statements

The 1934 Act prohibits solicitation of a proxy unless each person solicited has been furnished with a written proxy statement containing specified information. As issuer making solicitations must furnish security holders with a proxy statement describing all material facts concerning the matters being submitted to their vote, together with a proxy form on which the security holders can indicate their approval or disapproval of each proposal to be presented. Even a company that does not solicit proxies from its shareholders but submits a matter to their vote must provide them with information substantially equivalent to that which would appear in a proxy statement.

References

• C. R. Alexander, M. A. Chen, D. J. Seppi, C. S. Spatt, (2009), The Role of Advisory Services in Proxy Voting, NBER Working Paper, Cambridge,
• C. R. Alexander, M. A. Chen, D. J. Seppi, C. S. Spatt, (2010), Interim News and the Role of Proxy Voting Advice, y Oxford University, Oxford,
• D. M. Branson, J. M. Heminway, M. J. Loewenstein, M. I. Steinberg, M. G. Warren III, (2008), Business Enterprises: Legal Structures, Governance, and Policy,
• R. A. Mann, B. S. Roberts, (2013), Essentials of Business Law and the Legal Environment, Cengage Learning, South-Western

Footnotes

Author: Alicja Ficek