A proxy statement is a document filed with the U.S. Securities and Exchange Commission (SEC) by a publicly listed company. Proxy statements give readers a vast amount of information about a company’s shareholders and management and other salient details that are often missing from an annual report, making proxy statements a vital source of information for every investor. Unfortunately, investors often overlook these statements, even though they offer pertinent information about a company’s prospects. A proxy statement typically consists of the following:

• Notice of annual meeting of shareholders
• Board structure
• Election of directors
• Board of directors compensation
• Executive compensation

We’ll now go through each of these sections and what to look out for. Notice of annual meeting of shareholders This section contains information on the agenda of the annual meeting, where and when it will occur. This section should give shareholders an idea of what topics will be covered at the meeting. Typically, there...