Owners of company stock may attend shareholder meetings. However, the physical attendance of all shareholders, sometimes thousands, would present a logistical challenge. A proxy card instructs a representative how to vote on your behalf when you cannot attend a shareholder meeting.
According to the U.S. Securities and Exchange Commission (SEC), "One of investors’ key rights is the right to vote their shares on important matters that affect the companies they own." Holders of a small number of shares may not feel compelled to attend, while others are prohibited by physical distance. A proxy card allows shareholders to exercise their rights in absentia.
The company delivers the proxy card by mail, often along with a yearly fund prospectus or annual shareholder information. Alternately, shareholders may consent to receive materials via email. The card includes voting issues, such as the election of board members or the ratification of the decisions of the Board of Directors. The card provides instructions on how to record your choices on each matter by mail, phone or Internet.
Proxy cards are not ballots. Rather, a proxy card directs a representative, or proxy voter, to vote your shares according to your instructions. Research the choices carefully before recording your preferences.
Return the proxy card by mail. Alternately, many companies allow proxy votes via the Internet and by phone. Keep the completed proxy card for your records.