Company reports
What is a proxy statement (DEF 14A)?
Updated
A proxy statement, filed with the SEC as form DEF 14A, for “definitive proxy,” is the document a public company must send shareholders before asking for their votes, most commonly ahead of the annual meeting. Because votes cover directors, executive pay, and auditors, the proxy is where governance lives. It is also, by some distance, the best public source on how much executives are actually paid.
What gets voted on
A typical annual-meeting proxy covers four things: election of directors, an advisory “say-on-pay” vote on executive compensation, ratification of the auditor, and any shareholder proposals. Since 2022, contested elections use a universal proxy card listing every nominee from both company and dissident slates, a small mechanical change that made proxy fights meaningfully easier to wage.
Shareholder proposals arrive under Rule 14a-8, which lets a qualifying holder force a proposal onto the ballot. Most fail, but recurring themes such as climate disclosure, board declassification and special-meeting rights have reshaped governance over time precisely through this channel.
The compensation disclosures
The heart of the proxy is executive pay. Compensation Discussion and Analysis (CD&A) explains the philosophy; the Summary Compensation Table gives three years of salary, bonus, stock awards, and option grants for the named executive officers; and further tables cover outstanding equity, pension values, and potential payments on termination or change in control, which is the one to read. Recent rules added a pay-versus-performance table linking compensation actually paid to shareholder returns, and the CEO pay ratio compares the CEO to the median employee.
The proxy also discloses related-party transactions, director independence, board committee membership, and beneficial ownership of directors and officers, the same population whose trades appear on Form 4.
The proxy family
DEF 14A is one member of a small family. A PRE 14A is the preliminary version, filed when the SEC must review the materials first. Routine proposals skip it. DEFM14A is the merger proxy, often the single most information-dense document in a deal, with the board’s negotiating history and bankers’ fairness analyses laid out in detail. After the meeting, the vote results arrive within four business days on an 8-K under Item 5.07, closing the loop on every proposal.
Timing and how to read it
Companies that fold Part III of the 10-K into the proxy must file it within 120 days of fiscal year end, so the proxy typically lands a few months after the annual report. Skim in this order: pay-versus-performance, the change-in-control table, related-party transactions, and any shareholder proposals the board opposes.
Proxies appear in each company’s filing stream, so look for DEF 14A among JPMorgan’s filings or Microsoft’s, and cross-reference pay packages against the insider selling on each company’s insider trading pages. Read together, the proxy tells you what management is paid to do; the filings tell you whether they are doing it.