Proxies and Annual Statenients

Proxies and Annual Statements

Back in olden days small shareholders weren't likely to cast votes at the annual meeting, unless they happened to live near corporate headquarters. The Securities Exchange Act of    1934 covered a whole lot of ground, and part of the ground covered had to do with public corporations /issuers letting shareholders vote by proxy.

This way, we don't have to travel to Redwood Shores, California,ju st to cast our votes at the Oracle annual shareholder meeting. Instead, shareholders can fill out the form received from our broker-dealers and let them vote per our instructions. Usually these proxy statements indicate how management thinks shareholders should vote.

Of course, we can vote however we want with our number of shares. Or if we sign the proxy and fail to indicate how we want to cast my votes, then the board of direct­ors/management of  the company gets to use those votes as they see fit. If the matter is of no major importance, the broker-dealer can cast the votes on behalf  of  their customer, if the customer has failed to return the proxy at least 10 days prior to the annual meeting. A major issue, such as whether two companies should merge, would be a different matter. we're talking more like the decision to retain KPMG as the firm's auditor.

The Securities Exchange Act of  1934 also requires public companies to report quarterly and annually. So, the broker-dealer forwards those reports as well as proxy materials to their customers, but they don't charge the customers. This is all a cost that the issuer must bear. Another name for a proxy is an "absentee ballot," by the way.


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