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Proxy Statement and Annual Meeting
Practical Law Article 8-504-0011 (Approx. 2 pages)
Proxy Statement and Annual Meeting
by Practical Law The Journal
| Published on 01 Dec 2010 • USA (National/Federal) |
An introduction to the Practical Law Proxy Statement and Annual Meeting Toolkit.
Due to recent changes to federal laws, companies should get an early start on planning their annual stockholders' meetings and preparing their 2011 proxy statements.
Recent changes to federal laws have increasingly focused on enabling stockholders to make more informed voting decisions and strengthening their power. As a result of these changes, companies will need to reconsider and revise their disclosure from last year.
State corporate laws and the rules of the securities exchanges require a company to hold an annual stockholders' meeting and deliver information relating to the meeting to its stockholders. The proxy statement is a formal direct communication from a company to its stockholders which:
- Provides information about the upcoming meeting, including the specific matters to be discussed.
- Provides corporate governance information about the company, such as descriptions of board committees, the nominations process and director communication policies.
- Solicits proxies from the stockholders for the meeting.
In addition, companies should have a well-planned meeting agenda, script and rules of conduct. In preparing these items, companies must take into account various recent amendments to federal laws, such as:
- In December 2009, the SEC adopted proxy disclosure enhancements that require companies to disclose additional information in their proxy statements including information about risk, compensation and director qualifications.
- In July 2010, Congress passed the Dodd-Frank Act, which, among other things, requires companies to hold stockholder advisory votes on executive compensation and the frequency of holding this vote, disclose further compensation information in their proxy statements and adopt independence standards for their compensation committees.
- In October 2010, the SEC issued proposed rules to implement the stockholder advisory votes and is expected to issue proposed rules on other Dodd-Frank Act requirements in the next eight months.
Practical Law's Toolkits offer a collection of resources on specific areas of legal risk and compliance. The Proxy Statement and Annual Meeting Toolkit provides a number of continuously maintained resources designed to help companies prepare a proxy statement and conduct an annual meeting of stockholders.
The following Proxy Statement and Annual Meeting Toolkit resource appears in the December 2010/January 2011 issue of Practical Law The Journal: