Proxy Vote

DEFINITION of 'Proxy Vote'

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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