Proxy Vote
A shareholder vote cast by an authorized representative on behalf of the shareholder, typically on corporate matters at an annual meeting.
What is Proxy Vote?
A proxy vote is a vote cast on a shareholder's behalf by an authorized representative (a 'proxy') at a corporate meeting, most commonly the annual shareholder meeting. Since most shareholders — especially individual investors — cannot attend meetings in person, companies send proxy statements (Form DEF 14A) to shareholders before the meeting, outlining issues to be voted on: board director elections, executive compensation (say-on-pay), auditor ratification, shareholder proposals, and major corporate actions like mergers. Shareholders can vote by mail, online, or by phone. Institutional investors exercise significant influence through proxy votes; proxy advisory firms like ISS and Glass Lewis advise institutions on how to vote.
Example
At Exxon Mobil's 2021 annual meeting, activist hedge fund Engine No. 1 won three board seats by convincing large institutional shareholders to vote via proxy for its director nominees over management's nominees. The campaign — involving just $40 million in stock — succeeded because major proxy advisory firms and institutional investors like BlackRock and Vanguard voted against management.
Source: SEC — Proxy Voting