Series 79: 11.4.4.1. The Proxy Statement

11.4.4.1. The Proxy Statement

Recall from Chapter 1 that a proxy statement is a disclosure document that a public company must send to its shareholders in advance of any meeting at which shareholders are expected to vote. The document is called a proxy statement because the information it provides must include instructions for how shareholders who can’t attend the meeting in person can instead vote “by proxy.” In practice, voting by proxy essentially means voting by mailing in a form or submitting one electronically. Most of the time, proxy statements deal with routine matters, such as the election of directors, but a proxy statement is also required any time an M&A transaction requires a shareholder vote. Note that a proxy statement may be necessary even if the transaction in question is not subject to registration. All that matters is whether a shareholder vote on the transaction is required.

To help ensure that shareholders get the information they need to make informed decisions, the SEC has rules about the contents of proxy statements. Whichever side is preparing the proxy statement for its shareholders must file it with the SEC—again, regardless of whether the transaction itself needs to be registered. That side’s adviser and legal counsel must carefully review all disclosures in the proxy statement for accuracy an