A proxy statement is a form or statement required from a firm when soliciting shareholder votes. This statement is filed with the Securities and Exchange Commission (SEC) in advance of an annual meeting, extraordinary general meeting or virtual special meeting. The Definitive Proxy Statement is known as a Form DEF 14A but may initially have preliminary “PREM” version filed with the SEC.
The statement provides the information to shareholders so they are able to make informed decisions about the matters that will be discussed at the meeting in question. In mergers and acquisitions, this meeting, usually an extraordinary general meeting or special meeting will be arranged specifically to vote on whether or not to accept the takeover proposal from the acquirer. In relation to a regular annual meeting, the proxy is likely to include election of officers to the board of directors, information on directors’ salaries, bonus and options plan information, as well as any declarations made by management and other senior officers. Analyzing this information can help traders understand how well management interests are aligned with shareholders and identify potential conflict of interest issues with auditors. It is also important to assess the effect any proxy advisory firms may have on the voting and how this will effect the merger arbitrage spread.
In order to obtain a copy of the statement filed by the target firm, the SEC has produced the following guidelines
How can I obtain a copy of a company’s annual proxy statement?
A company is required to file its annual proxy statement with the SEC no later than the date proxy materials are first sent or given to shareholders. You can see this filing by using the SEC’s database, known as EDGAR. To access the EDGAR database, go to the SEC’s web site – www.sec.gov – and find the section entitled “Filings and Forms (EDGAR).” Click on “Search for Company Filings” When you get to the screen entitled “Search EDGAR Database,” click on “Companies and Other Filers.” Then enter the name of the company and then click “Find Companies.” Select the appropriate company to view its SEC filings.
To view the annual proxy statement, select the most recent filing that has the title “DEF 14A.” It’s called a “DEF 14A” because it’s the “definitive,” or final, proxy statement. “14A” refers to the fact that statements are filed pursuant to Section 14(a) of the Securities Exchange Act of 1934
Proxy Statement Definition
In the definitions section of the DEFM14A filing with the SEC by Fitbit (FIT) a proxy statement is described as
“Proxy Statement” means, collectively, the letter to stockholders, notice of meeting, proxy statement and form of proxy that will be provided to stockholders of the Company in connection with the Merger and any annexes, schedules or exhibits required to be filed, or actually filed, with the SEC in connection therewith (including, in each case, any amendments or supplements thereto).
This broad definition therefore covers a range of interconnected documents. A description that sometimes confuses new traders as to what, specifically is the proxy statement. As new updated version are issued over time it is normal to refer to the current statement as the most recent release. Any reference to an earlier version must be clearly stated as being so to avoid confusion.
