The Proxy Statement – The Key to Knowing More about Your Investment

Unless you are pretty heavily involved in the stock market and investments, you might not have heard of the proxy statement before. The proxy statement is what all companies that are traded on the stock exchange have to release every year detailing some very important information. Some of the information that is included is:

  • Things that shareholders are in need of voting on
  • Biographical information for the Board of Directors for the company
  • The salary and benefit information for the company’s top executives
  • The amount of stock shares that are held by the top executives

All of this information is supposed to help the investor make an informed decision when it comes to deciding whether or not to initially invest their money in the company or if they want to continue investing money in it.

With all of the information included on the proxy statement, it is easy to see why it is considered to be probably the most interesting thing to do with investing. It tells you how much top executives of the company make and all of their benefits to being in their position. Information like that is highly sought out by some people, like gossip magazine reporters and other journalists. It seems like a way to justifiably be nosy about a company and its dealings. Of course, a potential investor and even current investors need to know if the company is being cheated out of money by the top executives. This has happened so many times before that it would make anyone a little gun shy about investing in major companies.

Not only does the proxy statement have to be released to current and potential investors, it also must be filed with the SEC. That way the current and potential investors know that the SEC is aware of what that company is doing and how much the top executives make. This is important because sometimes investors do not know everything that they should know about the information they see on the proxy statement. If the SEC notices something amiss, however, that is an extra protection for the investor.

If you are looking to invest your money into a company, it is definitely in your best interest to, not only read the proxy statement, but also to have a more knowledgeable person explain everything on the statement to you. That way there is no question about whether or not you understand the business dealings of the company in question and you can make an informed decision about investing in it.

About Richard Wilson