Ballot
What Is a Ballot?
A ballot is a document utilized by a shareholder to exercise their voting rights. Such a ballot is typically submitting by shareholders (electronically or via mail) ahead of their company's annual general meeting (AGM) or by proxy.
Shareholders may likewise utilize ballots to vote on important issues emerging at different times during the year, for example, whether to acknowledge an offer by an outside party who wishes to purchase the company.
How Ballots Work
Albeit electronic ballots have become more normal in recent years, shareholders are additionally free to present their ballots in person at the annual meeting. These meetings are required by law and are open for all shareholders to join in.
Not all shareholders will receive a ballot. For some's purposes, for example, the individuals who own shares through mutual funds, exchange-traded funds (ETFs), or other pooled investment vehicles, the ballots might be presented by the manager of the fund in the interest of its shareholders. In these circumstances, the investment manager will quite often vote for the proposals put forward by the company's management.
Each shareholder has an option to vote on issues connecting with the company they own. No less than one time each year, public companies must prepare a proxy statement called SEC Form DEF 14A. This statement determines what things will be put up for a vote by shareholders.
A proxy vote is a ballot projected by one person or firm for a company's shareholder who can't go to a meeting, or who would rather not vote on an issue.
A portion of the things put on the ballot are of a standard sort, for example, endorsement of the company's audit fees for that year. Different issues, like the re-appointment of existing individuals from the Board of Directors or the request to make changes to the Board, additionally show up. On occasion, these votes can turn out to be very petulant, with management or gatherings of shareholders upholding that shareholders vote in a specific way.
Genuine Example of Ballots
One area where shareholders have expressed conflict with management in recent years is as to executive compensation. This ballot thing is a non-restricting "say-on-pay" vote that sometimes is utilized by shareholders to express their disappointment at the sums the Named Executive Officers (NEOs) are paid in cash, equity, and other non-cash compensation.
In spite of the fact that shareholders generally vote for management's proposals, a few remarkable exemptions do happen. For instance, in 2015 a faltering 85% of Nuance Communications (NUAN) shareholders voted against their management's proposed compensation package for the company's CEO.
Technically, the power of shareholders is vital in any corporation. On the whole, they can hire or fire the CEO, choose the Board of Directors and executive compensation, and even call for the sale or liquidation of the company. In practice in any case, shareholders are generally passive, assigning decision-production to the management team and Board of Directors.
Features
- The ballot is the official document utilized by shareholders to vote on corporate activities, board individuals, and different measures.
- Ballots are essentially submitted before or during the company's annual meeting. Be that as it may, ballots will likewise be distributed on the off chance that special choices should be made consistently.
- Generally, ballots were physical documents; today, electronic ballots are likewise utilized.
- Instances of votes that could show up on a ballot incorporate routine matters as well as huge decisions, for example, whether to change the management team or endorse the sale of the company.
