What is a proxy vote?
It's a vote cast on another person's behalf. If a shareholder of a corporation is unable to attend the any important meeting, such as an annual meeting, they can instead cast a proxy vote, by choosing somebody else to attend in their place and vote in line with their directions.
Where have you heard about proxy votes?
Around national elections and referendums. Like at shareholder meetings, voters can choose somebody they trust to vote on their behalf on election days if for some reason they can't get to their polling station – if they are ill or abroad, for example.
What you need to know about proxy votes.
Before a company's annual meeting, its shareholders receive a proxy card, a proxy statement and a copy of the company's annual report. The proxy card details the voting instructions. The proxy statement contains information on the share ownership and executive structure of the company as well as any issues that will be voted on at the meeting.
If a shareholder decides not to attend the meeting, they choose someone – perhaps from the company's management team – to vote on their behalf, in line with the directions they give on their proxy card. They have to cast their proxy vote before the specified deadline – often 24 hours before the meeting but they can change their mind at any point before then.
Find out more about proxy votes.
Proxy votes can also be cast by investment management companies on behalf of mutual fund shareholders, for example.