Equilar recently released its annual “Preparing for Proxy Season” report, based on analysis of the proxy statements including CD&A’s of the Equilar 100 companies (the 100 largest US companies by revenues) from 2020 through 2024. DFIN was asked to provide independent commentary for the report, adding insight and advice to the numbers.
Key data in the report includes:
For years, organizations have touted their sustainability and corporate social responsibility efforts in voluntary reports. Increasingly, though, company stakeholders are demanding more accurate and transparent Environmental, Social, and Governance (ESG) data.
The 2025 proxy season is here, and for the third year, virtually all public companies will be required to include pay-versus-performance (PVP) disclosure details. Companies that recently left Emerging Growth Company (EGC) status in the past year may need to include the disclosure for the first time in their next proxy.
In 2022, the SEC adopted new rules for proxy votes, which changed the process used for shareholder votes in contested board elections at publicly traded companies. Notably, both companies and any dissident groups soliciting proxies for director nominees and slates are now required to provide voters with a universal proxy card that lists all candidates for election to the board in the same place, no matter who (management or dissident) is promoting the candidates.
Benchmark’s President and CEO, together with its General Counsel and Chief Legal Officer, wanted to broaden their investor base and shareholder engagement and prepare for SEC mandate compliance.
ActiveDisclosure helped Benchmark with corporate initiatives and regulatory compliance are now supported by collecting and sharing ESG information with stakeholders using annual sustainability reports, annual and quarterly SEC filings, and proxy statements.
Boards of directors must have expertise and provide oversight over an ever-expanding array of risks and topics (including sustainability, human capital, cybersecurity, AI, and who knows what’s next. Skills matrices have for many years been used for strategic board refreshment purposes. More recently, boards of directors are being included in proxies and elsewhere, to instill confidence in investors and others that the board has the requisite skills to effectively provide oversight of this expanding array of challenges.
Effective shareholder communication is not just a regulatory requirement but a strategic tool for fostering trust, transparency, and long-term success. Shareholders seek clarity and engagement from the companies they invest in, and strong communication provides the foundation for cultivating these relationships. When done correctly, it not only informs but empowers them to make decisions that shape corporate governance and influence a company’s future.
STAAR Surgical was successfully using ActiveDisclosure for financial reporting and SEC filing, and greatly benefited from the easy-to use and time-saving collaboration it enabled among its financial team. They wanted to experience similar benefits during their proxy disclosure projects involving legal staff, financial staff and others.
Every year in connection with the annual shareholder meeting, and sometimes more often in the case of a special meeting, public companies must file a proxy statement. Proxy statements outline various plans for the company to shareholders, from the election of directors, to pay for executives, approval or amendment of equity plans, and even shareholder-sponsored proposals should any be received. The proxy is a requirement for any company with public securities and must be filed with the Securities and Exchange Commission as proscribed in SEC Form DEF 14A.
Great design can be applied to everything from automobiles to smartphones to kitchen appliances. But proxy statements?
Yes, absolutely! In fact, DFIN recently released its 12th annual Guide to Effective Proxies, which shows just how proxy statements can leverage design principles to communicate ideas more effectively.