Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Ballot

What it is:

A ballot reflects a shareholder's vote on a corporate decision.

How it works (Example):

Most corporations have an annual shareholders meeting in which shareholders come to listen to presentations by the company's management and to vote on key issues, such as whether to merge with another company, whether to re-elect certain board members, and other issues. Shareholders cast their votes via ballots. Ballots are traditionally on paper, but some companies allow shareholders to cast their ballots via phone or the Internet.

A proxy is a person, agency, or entity authorized to act on behalf of another person, agency or entity. In the finance world, proxy most often refers to an entity authorized to vote on behalf of a shareholder. It also commonly refers to Securities and Exchange Commission Form 14-A (the "proxy statement"), which is the document containing the actual voting ballot and disclosing information related to management compensation and matters on which to vote. The Securities and Exchange Commission requires public companies to file proxy statements annually prior to the companies' annual shareholder meetings; the objective is to inform shareholders of the meeting, what matters are up for a vote, and instructions for voting.

Why it Matters:

Ballots are how shareholders vote. Shareholders are the owners of companies, and they have the ultimate say in what a company decides, who serves on the board of directors, and whether to sell the company.

In many cases, shareholders don't actually receive a ballot in the mail if they own shares indirectly, as is the case with mutual funds (in that situation, shareholders own shares of the mutual fund rather than shares of the underlying companies the mutual fund invests in). Investors who hold shares in street name (that is, the shares are registered to the investor's brokerage firm rather than in his or her own name) might also not receive ballots. In these cases, the fund manager or brokerage firm is the actual shareholder in the eyes of the company, and they receive the ballot and can vote the shares. These people are responsible for voting the shares in the best interest of their investors, and in many cases, a mutual fund is a sizeable shareholder -- its vote may have a significant impact on the company.

Related Terms View All
  • Auction Market
    Though most of the trading is done via computer, auction markets can also be operated via...
  • Best Execution
    Let's assume you place an order to buy 100 shares of Company XYZ stock. The current quote...
  • Book-Entry Savings Bond
    Savings bonds are bonds issued by the U.S. government at face values ranging from $50 to...
  • Break-Even Point
    The basic idea behind break-even point is to calculate the point at which revenues begin...
  • Calendar Year
    If Company XYZ starts its fiscal year on January 1 and ends its fiscal year on December...