Navigating the annual proxy season

What and when is proxy season?

Proxy season refers to the annual peak period when the majority of public companies hold their shareholder meetings. The season typically runs between March through June.

Who’s involved?

• Issuers – Prepare proxy statements, engage shareholders, and respond to investor concerns.
• Shareholders – Required to vote on management proposals such as election of directors, executive compensation, and ratification of the independent auditor as well as any shareholder proposal.
• Institutional investors – Influence corporate governance through voting power and engagement.
• Proxy advisory firms – Provide recommendations that shape shareholder voting decisions.

Proxy voting season and key issues

Several issues dominate proxy season, shaping corporate governance and investor relations:

Board elections

Investors evaluate director qualifications, independence, and diversity. Boards are expected to demonstrate a mix of expertise that aligns with the company’s long-term strategy. Shareholders are placing greater emphasis on board refreshment and accountability.

Executive compensation (“say on pay”)

Shareholders cast advisory votes on CEO and executive pay packages. Companies must justify pay structures with strong performance alignment. Disclosures on pay equity, incentive plans, and shareholder value creation are under heightened scrutiny.

Shareholder proposals

Investors are increasingly focused on proposals related to ESG (environmental, social, and governance), DEI (diversity, equity, and inclusion), and political transparency. Companies should proactively engage with shareholders to understand concerns and build consensus before votes take place.

Auditor approvals & corporate actions

Shareholders assess auditor independence, financial reporting integrity, and corporate transactions. Investors expect transparency on auditor selection and any changes in financial governance practices.

The rise of shareholder activism

Institutional investors and activist shareholders are playing a more significant role in corporate decision-making. Their influence extends to:

• Board composition and leadership changes – Activists push for independent directors and fresh perspectives.
• Strategic direction and performance oversight – Investors demand clear growth strategies and accountability.
• Proxy advisory firm recommendations – Reports from firms like ISS and Glass Lewis shape voting outcomes, making proactive engagement essential.

Regulatory and compliance factors during proxy season

Companies must stay ahead of evolving regulations that impact proxy filings and voting outcomes. Key considerations include:

• SEC rules – Learn more about SEC Form N-PX, which affects fund managers’ proxy vote disclosures.
• ESG & climate disclosures – Regulatory bodies are intensifying climate-related disclosure requirements, making transparency essential.
• XBRL tagging challenges – Ensuring accuracy in financial reporting.  Learn more about Common XBRL tagging issues in proxy statements.
• Universal proxy rules – Reshaping board election dynamics by giving shareholders more flexibility to vote across slates. Companies must adapt their strategies to engage investors effectively and ensure compliance.

How companies can prepare for proxy season

Taking proactive steps can streamline the proxy process and improve shareholder engagement. Key strategies include:

• Early investor engagement – Companies should communicate with key shareholders well before proxy season to address concerns and align expectations.
• Clear & proactive shareholder communication – Transparency in governance decisions builds investor confidence.
• Leverage technology for proxy voting – Digital tools and analytics enhance shareholder outreach and voting efficiency.
• Enhance proxy design & readability – See how W&T Offshore improved its proxy statement, making complex information more accessible.

Get expert guidance

Toppan Merrill is here to help you navigate proxy season with confidence. Get started with a free download of the Proxy Statement Style Guide.