We use cookies to improve security, personalize the user experience,
enhance our marketing activities (including cooperating with our marketing partners) and for other
business use.
Click "here" to read our Cookie Policy.
By clicking "Accept" you agree to the use of cookies. Read less
Proxy Reporting: A Comprehensive Guide to Its Legal Definition
Definition & Meaning
Proxy reporting refers to the requirement set by the Securities and Exchange Commission (SEC) for public companies to disclose the compensation of their top five highest-paid executives. This disclosure is typically presented in a summary compensation table within proxy statements, which are sent to shareholders annually. The purpose of proxy reporting is to provide transparency regarding executive compensation, allowing shareholders to make informed decisions during company votes. Additionally, the IRS requires non-profit organizations to report the pay of their top executives through Form 990.
Table of content
Legal Use & context
Proxy reporting is primarily used in the context of corporate governance and securities law. It is crucial for public companies, as they must comply with SEC regulations regarding the disclosure of executive compensation. This term is relevant in various legal areas, including corporate law and securities regulation. Users can manage proxy reporting requirements through forms and templates available on platforms like US Legal Forms, which provide resources drafted by legal professionals.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A public corporation, XYZ Corp, prepares its annual proxy statement, which includes a detailed summary compensation table showing the salaries, bonuses, and stock options for its five highest-paid executives. This information is sent to shareholders for their review before the annual meeting.
Example 2: A non-profit organization, ABC Charity, completes Form 990, disclosing the compensation of its top five executives, ensuring compliance with IRS requirements for transparency (hypothetical example).
Relevant laws & statutes
The primary law governing proxy reporting is the Securities Exchange Act of 1934, which mandates the disclosure of executive compensation in proxy statements. Additionally, the IRS regulations regarding Form 990 for non-profits also play a significant role in compensation reporting.
Comparison with related terms
Term
Definition
Key Differences
Proxy Reporting
Disclosure of executive compensation in proxy statements.
Focuses on public companies and their executives.
Executive Compensation
Overall pay and benefits provided to executives.
Broader term that includes all forms of compensation, not just those disclosed in proxy statements.
Form 990
IRS form for non-profits to report financial information.
Specifically for non-profit organizations, focusing on compensation disclosure.
Common misunderstandings
What to do if this term applies to you
If you are a shareholder or a member of a public company, review the proxy statement you receive to understand the compensation of top executives. If you are involved in a non-profit organization, ensure compliance with IRS requirements by accurately completing Form 990. For assistance, consider using US Legal Forms' templates for proxy statements or Form 990. If your situation is complex, it may be beneficial to consult with a legal professional.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.