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What Is a Proxy Statement?
Publicly traded companies are required to send "proxy statements" to their true owners (i.e., shareholders who own publicly traded shares) in connection with the company’s annual shareholder meeting. Proxy statements contain valuable information for investors and allow shareholders to vote in board of directors’ elections as well as other corporate business matters.
Proxy statement may contain such information as:
- A description of who serves on the board of directors
- Upper management’s salaries and bonuses
- A disclosure of stock ownership by directors and officers
- Information about "sweetheart" loans made to managers
- Business plans, conflicted transactions, and litigation risks
Oversight, Compliance, and Adequate Disclosures in Proxy Statements
Directors must treat proxy statements with a high level of care. They may be required to file the final statements with the Securities and Exchange Commission (SEC). A director should always review a proxy statement and pay close attentive to matters he personally contributed to.
Serious legal issues may arise if the directors do not send out proxy statements in the timely manner or fail to disclose business matters effecting shareholders.
When to Seek Help from an Attorney
If you have questions or issues regarding proxy statements, you should consult a qualified business lawyer with experience in corporate law and business litigation. A qualified lawyer will determine if the company may have abused your rights, failed to disclose important information, or violated any applicable laws.
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Last Modified: 03-04-2014 10:34 AM PST
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