Proxy

A proxy is a person who is authorized to act on behalf of another person or entity. In the financial world, proxies are often used to vote on corporate matters, such as electing directors or approving mergers and acquisitions.

There are two types of proxies: solicited and unsolicited. Solicited proxies are those that are requested by the company or other entity that is seeking the vote. Unsolicited proxies are those that are not requested by the company or other entity.

Solicited proxies are typically used when a company is holding a shareholder meeting to vote on a major issue, such as a merger or acquisition. The company will send a proxy statement to its shareholders, which includes information about the proposed transaction and instructions on how to vote. Shareholders can then either vote in person at the meeting or by proxy.

Unsolicited proxies are typically used when a shareholder is unhappy with the way a company is being run and wants to replace the board of directors. The shareholder will file a proxy statement with the Securities and Exchange Commission (SEC) and then send it to the company's shareholders. The shareholders can then vote for the dissident's slate of directors or for the company's slate of directors.

Proxy voting is an important part of the corporate governance process. It allows shareholders to have a say in how their companies are run and to hold management accountable.