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A '''proxy statement''' is a letter sent to [[shareholder|shareholders]] of a corporation, by the [[board of directors]] or an activist shareholder, in anticipation of a voting contest at the annual meeting. Because shareholders tend to be spread over the entire nation, it is infeasible for them all to vote in person, and therefore, management and other interested parties "campaign" and secure "proxy votes" by solicitations such as a proxy statement.
A '''proxy statement''' is a letter sent to [[shareholder]]s of a corporation, by the [[board of directors]] or an activist shareholder, in anticipation of a voting contest at the annual meeting. Because shareholders tend to be spread over the entire nation, it is infeasible for them all to vote in person, and therefore, management and other interested parties "campaign" and secure "proxy votes" by solicitations such as a proxy statement.
The cost of producing a proxy statement, ensuring its compliance with the [[Securities and Exchange Commission|SEC]], and mailing it to ''all shareholders'' as required, is astronomical. As a result, typically only the company's management, or an activist [[institutional shareholder]], will be able to make a proxy statement, often ensuring that board election is uncontested. As an attempt to remedy this undemocratic element created by the amazing cost of the endeavor, the SEC has required corporate boards to, at their own cost, place [[shareholder proposal|shareholder proposals]] which meet certain indicia on management's own proxy statement.
The cost of producing a proxy statement, ensuring its compliance with the [[Securities and Exchange Commission|SEC]], and mailing it to ''all shareholders'' as required, is astronomical. As a result, typically only the company's management, or an activist [[institutional shareholder]], will be able to make a proxy statement, often ensuring that board election is uncontested. As an attempt to remedy this undemocratic element created by the amazing cost of the endeavor, the SEC has required corporate boards to, at their own cost, place [[shareholder proposal]]s which meet certain indicia on management's own proxy statement.
[[category:Corporations]]
[[Category:Corporations]]