SEC Reporting

Chapter 8Proxy Statements

Learning objectives

• Identify the relationship of the proxy statement to the SEC’s other reporting requirements.
• Determine the involvement of the accountant in the preparation of the proxy statement.

Introduction

Because of the geographic dispersion of the owners of a public company, it is unlikely that a quorum could be obtained at any meeting that required a vote of the shareholders. As a result, the use of proxies and proxy statements were developed to facilitate such votes. A proxy is broadly defined as any authorization given to someone by security holders to act on their behalf at a stockholders’ meeting. The term proxy also refers to the document used to evidence such authorization. Persons soliciting proxies must comply with Regulation 14A of the 1934 Act, which prescribes the content of documents to be distributed to stockholders before, or at the same time, such solicitation occurs.

The informational content of the proxy statement provided to the stockholders depends on the action to be taken by the stockholders. Schedule 14A prescribes the informational content required based on the specific circumstances.

When the vote is solicited in connection with certain transactions involving the registration of securities on Form S-4 (for example, exchange offers, mergers, transfer of assets), the S-4 prospectus may be expanded to serve as the proxy statement or informational statement for the transaction under Section 14 of the 1934 Act. In such ...