How Does Proxy Voting Benefit Shareholders?


Quick Answer

Proxy voting is voting by a person who is present on behalf of one who is absent, and it benefits shareholders because members are allowed to vote on issues even when they are not present at a meeting or conference, explains Investopedia. Shareholders receive their proxy ballots and information by mail.

Continue Reading
Related Videos

Full Answer

A proxy statement accompanying the proxy ballot describes the issues being voted on by the shareholders, according to Investopedia. Votes are commonly taken to elect board directors, approve mergers or acquisitions, and decide on a stock compensation plan. Because shareholders are often unable to attend annual meetings or special conferences when voting occurs, corporations offer shareholders the benefit of proxy voting to keep them involved in crucial decisions. A registered management company that invests in a corporation is also given the privilege of casting proxy votes regarding issues that affect investments in their portfolios. For example, a mutual fund such as Fidelity Investments is a shareholder in a variety of corporations in which the mutual fund votes on behalf of its own shareholders.

Mutual funds publish records of their voting on their websites, and the Securities Exchange Commission keeps records on all votes, reports Fortune. So, even in such cases, although investors are not getting a direct vote on matters, they can make informed decisions about which mutual funds to invest in according to their own beliefs and principles.

Learn more about Investing

Related Questions