The Proxy Edge: Exercising Your Shareholder Rights

by John Deysher

Within the next few months, investors’ mailboxes will be groaning under the weight of annual reports and proxy statements.

While the annual report often looks nicer, with glossy pages and color photos, the proxy can be just as important, detailing everything from executive pay to policies on corporate governance.

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Indeed, corporate governance has been a hot button issue since the collapse of Adelphia, Enron, Worldcom (now MCI) and others. The Securities and Exchange Commission (SEC) is keeping the heat on public companies by requiring broader and deeper disclosure on how corporations are actually governed—most of which can be found in the proxy. If you wanted to find a company that was “ideally” governed in line with shareholders’ interests, it would be the proxy statement that you would turn to for most of the information (see accompanying box).

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