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Proxy statements are intended for shareholders with voting rights, while annual reports are for anyone following the company. This may be shareholders, including potential investors, regulators, financial institutions and more.
SEC Form DEF 14A, also known as a "definitive proxy statement," is a required filing when a shareholder vote is required. The Form DEF 14A outlines the list of items up for vote by shareholders, such as the hiring of new directors or other business decisions.
The SEC's new rule requires companies to disclose the relationship between executive compensation and the company's financial performance, including information on the company's total shareholder return and the performance of the company's peers.
SEC Form PRE 14A, also known as a preliminary proxy statement, is a form that is filed with the Securities and Exchange Commission (SEC) when a company holds a shareholder vote is required on an issue not related to a contested matter or merger/acquisition.
A proxy statement also details the compensation packages of a company's CEO, its chief financial officer and its three other highest paid executives. The compensation is broken down by salary, bonuses, stock options, pension benefits and more.
"In the annual proxy statement, a company must disclose information concerning the amount and type of compensation paid to its chief executive officer, chief financial officer and the three other most highly compensated executive officers A company also must disclose the criteria used in reaching executive compensation ...
A proxy statement generally includes the names and short biographies of individuals on a company's board of directors, including those who are running for reelection and new candidates chosen by the board's nominating committee.
Proxy statements describe matters up for shareholder vote, and include management and executive compensation information if the shareholders are voting for the election of directors.