Proxy Vote

What is a 'Proxy Vote'

A proxy vote is a ballot cast by one person on behalf of another. One of the benefits of being a shareholder is the right to vote on on certain corporate matters. Since most shareholders cannot or do not want to attend the annual and special meetings at which the voting occurs, corporations provide shareholders with the option to cast a proxy vote. Shareholders receive a proxy ballot in the mail along with an informational booklet called a proxy statement describing the issues to be voted on. Shareholders return a form by mail agreeing to have their vote cast by proxy. Issues commonly decided by proxy vote include electing directors to the board, approving a merger or acquisition, and approving a stock compensation plan.

BREAKING DOWN 'Proxy Vote'

Registered investment management companies also cast proxy votes for the securities in their portfolios. For example, Fidelity Investments' mutual funds are shareholders in numerous corporations. As such, Fidelity casts proxy votes on behalf of its mutual fund shareholders.

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RELATED FAQS
  1. What can shareholders vote on?

    Understand the usual voting rights of common stock shareholders, along with the importance of shareholders exercising their ... Read Answer >>
  2. How do proxy fights work?

    A proxy fight occurs when a group of shareholders in a particular company attempts to join together to effect change in a ... Read Answer >>
  3. If I own a stock in a company, do I get a say in the company's operations?

    You don't get a direct say in a company's day-to-day operations, but, depending on whether you own voting or non-voting stock, ... Read Answer >>
  4. How do a corporation's shareholders influence its Board of Directors?

    Find out how shareholders can influence the activity of the members of the board of directors and even change official corporate ... Read Answer >>
  5. How does a merger affect the shareholders?

    Explore the effect of a merger and understand how the process affects shareholders of the newly merged firm in terms of stock ... Read Answer >>
  6. What is the difference between a hostile takeover and a friendly takeover?

    Learn about the difference between a hostile takeover and a friendly takeover, and understand how proxy fights and tender ... Read Answer >>
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