Shareholders and Corpoate Governance Flashcards
an elected group of individuals who have a legal duty to establish corporate objectives, develop broad policies, and select top-level personnel for a company.
Board of directors
the process by which a company is controlled or governed.
Corporate governance
the compensation (total pay) of corporate executives, including salary, bonus, stock options, and various benefits.
Executive compensation
occurs when a person gains access to confidential information about a company’s financial condition and then uses that information, before it becomes public knowledge, to buy or sell the company’s stock; generally illegal.
Insider trading
a financial institution, pension fund, mutual fund, insurance company, university endowment, or similar organization that invests its accumulated funds in securities offered for sale on stock exchanges.
Institutional investor
a legal instrument giving another person the right to vote the shares of stock of an absentee shareholder; in effect, an absentee ballot for shareholders who do not attend the annual meeting in person.
Proxy
changes in the nomination process for a company’s board of directors that allows shareholders to nominate their own candidates.
Proxy access
U.S regulation requiring public companies to hold an advisory shareholder vote on executive compensation at least once every three years; also required in several other countries.
Say-on-pay
the U.S federal government agency whose mission is to protect stockholders rights by making sure that stock markets run fairly and that investment information is fully disclosed.
Securities and exchange commission (SEC)
a person, group, or organization owning one or more shares of stock in a corporation; the legal owners of the business.
Shareholder
a lawsuit initiated by one of more shareholders to recover damages suffered due to alleged actions of the company’s management.
Shareholder lawsuit
the use of stock ownership as a strategy for promoting social, environmental, and governance objectives.
Social investment
a resolution on an issue of corporate social responsibility placed before shareholders for a vote at a company’s annual meeting.
Social responsibility shareholder resolutions
a form of compensation. Options represent the right to buy a company’s stock at a set price for a certain period of time. The option becomes valuable to its holder when, and if, the stock price rises above this amount.
Stock option
