Reviewed by Aug 27, 2020| Updated on
A proxy is an individual, legally allowed to act on behalf of another party or a format that would allow a participant to vote without being physically present at the meeting. Shareholders who do not attend the Annual General Meeting (AGM) of a company may vote their shares through a proxy, by authorising someone else to cast votes on their behalf, or may vote by email.
Functioning of a Proxy
Although voting by proxy is always a choice, management urges shareholders to vote in person. If the shareholder is unable to participate, then proxy voting is an option. If a person must serve as a proxy for an individual, specific documentation may be needed that specifies to what degree the proxy may talk on behalf of the individual.
A formal document from the attorney may be necessary to grant permits for such acts to be performed. The shareholder signs an attorney's power and extends the official authorisation to vote on behalf of the mentioned shareholder at the annual meeting to the designated person.
What is a Proxy Statement?
Both shareholders receive a packet of information containing the Proxy Statement prior to the annual shareholder meeting. The proxy documents provide shareholders with the requisite details to get informed votes on topics that are relevant to the success of the company.
A Proxy Statement offers insight to shareholders and prospective investors into the governance and management activities of a company.
The proxy discloses crucial details on the agenda items for the annual meeting, lists management and board members' credentials, and acts as a ballot for the board of directors elections. It lists the major owners in a company's stock and offers specific information on executive compensation.
Management and shareholders are still bringing forward plans. If the shareholder comes in late and wants to vote for him or herself, a proxy can not vote.
Shareholders may be able to vote by mail, mobile, or internet when proxy voting is done remotely. The information in the proxy statements is used by shareholders to help in the decision-making process.