DEF 14A (proxy statement)

DEF 14A is the SEC filing code for a definitive proxy statement, the document a public company sends shareholders before an annual or special meeting so they can vote. It describes every proposal on the ballot and the board's recommendation on each.

How it works

A typical annual meeting proxy includes:

• Board nominees, with backgrounds, independence and committee roles.
• Executive compensation: the Compensation Discussion and Analysis, summary compensation table, pay versus performance disclosure and CEO pay ratio.
• Say-on-pay, a non-binding advisory vote on executive pay.
• Auditor ratification and audit fees.
• Equity plan proposals, such as increasing the share pool.
• Shareholder proposals with the board's response.
• Beneficial ownership of directors, officers and 5% holders.

If the meeting includes non-routine items, such as a merger, reverse split or charter amendment, the company generally files a preliminary proxy (PRE 14A) at least 10 calendar days before the definitive version. Additional soliciting materials are filed as DEFA14A. In contested elections, both sides must use a universal proxy card listing all nominees, a requirement since 2022.

Why it matters for traders

The proxy is the best single source on who controls the company and how management is paid. Look for:

• Pay tied to metrics such as revenue or EPS targets, which can shape management incentives.
• Large equity plan increases, which signal future dilution.
• Reverse split authorizations, often a precursor to a split for a stock below $1.
• Contested elections, where an activist investor files its own proxy (DEFC14A).

Results are reported afterward under 8-K Item 5.07.

Example

A hypothetical biotech, Northwind Therapeutics (NWTX), files a DEF 14A asking shareholders to approve a reverse split in a range of 1-for-5 to 1-for-20 and to add 5 million shares to its equity plan, which currently has 45 million shares outstanding. The plan increase alone represents potential dilution of about 11%.

FAQ

What is the difference between DEF 14A and PRE 14A?

PRE 14A is the preliminary proxy, required for certain non-routine matters. DEF 14A is the final version sent to shareholders.

When are proxy statements filed?

Typically 30 to 60 days before the annual meeting. Companies usually file within 120 days of fiscal year-end to incorporate proxy information into the 10-K.