shareholder proposal

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Shareholder Proposal

A proposal for a publicly-traded company to take a certain course of action, submitted by a shareholder. Any shareholder who owns more than $2,000 in stock or 1% of the company is permitted to initiate a shareholder proposal. It must be placed on the agenda and put to a vote at the next available annual shareholders meeting, unless the SEC gives the company special permission to exempt it. Generally speaking, a shareholder makes a shareholder proposal to force the company to do something that the management does not want it to do. As a result, management tends to urge shareholders to vote against shareholder proposals, though they may seek a compromise with the shareholders if the proposal is popular.

shareholder proposal

A proposal that is submitted by a shareholder for action at a forthcoming annual meeting. If the holder gives timely notice of his or her intentions, the firm's management must include the proposal in the proxy statement and must give the other shareholders a chance to vote for or against the proposal. Typical shareholder proposals involve voting rights, management compensation, and corporate charitable contributions.

Shareholder proposal.

A shareholder proposal is a resolution that's put forward for consideration at a corporation's annual meeting by an individual shareholder or a group of shareholders rather than by the corporation's board of directors.

A shareholder who has owned at least $2,000 worth of stock or 1% of a company's outstanding shares for at least a year is entitled to offer a proposal.

In most cases, management opposes these proposals and urges shareholders to vote against them. However, management may negotiate with activist investors to make changes in corporate policy to avoid the threat of a shareholder proposal.

A shareholder proposal must be included in proxy materials unless the corporation receives authorization from the Securities and Exchange Commission (SEC) to omit it.

References in periodicals archive ?
Executive compensation is a major issue for many boards, but in terms of the raw number of shareholder proposals a company receives, it is not the greatest concern.
It shows a fundamental shift in the types of resolutions submitted to a vote by shareholders, the sophistication developed by activist investors in the use of technology and social media to agitate for corporate change outside of the AGM, and the increased propensity of senior management to implement precatory shareholder proposals on corporate governance that have received the support of a majority of voting shares.
Investors continue to push for independent board chairs, submitting a record number of shareholder proposals on the topic, though average support for these proposals declined this year to 31 percent from 36 percent in 2012.
The fourth option, and the focus of this paper, is for owners to file shareholder proposals to the Board to communicate their interests in changing corporate practices or by-laws.
Shareholder proposals seeking to allow investors to have a say on the CEO's pay and to restrict retirement benefits for senior executives were rejected.
Carol Bowie, IRRC's director of corporate governance research, says that companies have taken concrete, responsive action on 67 of the 167 shareholder proposals (about 40 percent) that received majority support in 2003.
Shareholder proposals to adopt annual elections received a majority vote of support in 2002 and 2003.
Investors Research Responsibility Center (IRRC), a non-profit organization which tracks corporate governance issues, notes that shareholder proposals that came to vote in the firms it tracks grew from 55 in 1986 to 99 in 1987, 186 in 1988 and 254 in 1989.
The shareholders voted to support each of the three proposals submitted by AIG, and, as the AIG Board recommended, shareholders withheld support for the three shareholder proposals submitted for consideration.
NYSE:TXI) Board of Directors and pass three corporate governance shareholder proposals at the company's annual meeting scheduled for Oct.
at which time the shareholder proposals will be considered and acted upon.