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 ?
In the majority of cases, announcements of shareholder proposals alert less informed investors to a potential conflict between managers and owners.
The company added that as per its earlier decision, the deadline for shareholders to submit trustee nominations or shareholder proposals for presentation before the meeting was at the close of business on 1 December 2015 and any shareholder who wishes to submit a trustee nomination or shareholder proposal for presentation at the 2017 annual shareholder meeting, must do so in writing as required under its by-laws no later than 28 November 2016, to its corporate secretary Anita Cooke Wells at 3 Bethesda Metro Center, Suite 1000, Bethesda, Maryland 20814.
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.
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.
M2 EQUITYBITES-October 20, 2014-Special Opportunities Fund announces submission of shareholder proposals to four closed-end funds
Further, the company mentioned that since it has moved the date of its meeting by over 30 days from its last annual shareholders' meeting, the deadlines for submissions of shareholder proposals at the meeting have changed as well.