Proxy statement

What is a proxy statement?

A proxy statement is the SEC filing that tells shareholders what they will vote on at a meeting, including director elections and executive pay. The SEC's proxy rules require one whenever management asks shareholders for authority to vote their shares, usually before the annual meeting. When directors are up for election, it includes executive compensation information. The final version appears on EDGAR as Form DEF 14A.

Why it matters to a revenue leader

The proxy statement shows how the CEO and other senior executives are paid, including the metrics behind their bonuses and equity awards. Those metrics, often revenue growth, adjusted earnings or margin, tend to flow down into the CRO's compensation plan and the sales team's targets. Reading the proxy tells a revenue leader what the board pays the CEO to deliver, and whether the sales comp plan points the same way.

A public facility services company's proxy shows that half of the CEO's annual bonus depends on revenue growth and half on adjusted EBITDA margin. The CRO's plan for the same year pays sales leaders on bookings alone. The CRO proposes adding a margin measure to sales leaders' plans so the sales team and the CEO are paid on the same results.