The Ideal Proxy Statement

9 Pages Posted: 17 Feb 2015

See all articles by David F. Larcker

David F. Larcker

Stanford University - Graduate School of Business

Brian Tayan

Stanford University - Graduate School of Business

Date Written: February 17, 2015


Institutional investors are highly dissatisfied with the quality of information that they receive about corporate governance policies and practices in the annual proxy. Across the board, they want proxies to be shorter, more concise, more candid, and less legal. The largest complaint involves executive compensation and the inability of investors to determine whether senior management is paid appropriately.

Based on recent survey data from major institutional investors, we describe the information that shareholders would like to see in the “ideal” proxy statement.

We ask: • What changes can companies make to proxies contain the information that investors want in a format that is easy to read and navigate? • Would shareholder understanding of corporate governance practices improve if companies provided clearer and more succinct data? • How might the debate about executive compensation change?

The Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance and executive leadership. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important. Larcker and Tayan are co-authors of the books Corporate Governance Matters and A Real Look at Real World Corporate Governance.

Keywords: annual proxy statement, DEF14a, shareholders, institutional investors, corporate disclosure, say on pay disclosure

JEL Classification: G14, G30, G38, M40

Suggested Citation

Larcker, David F. and Tayan, Brian, The Ideal Proxy Statement (February 17, 2015). Rock Center for Corporate Governance at Stanford University Closer Look Series: Topics, Issues and Controversies in Corporate Governance No. CGRP-47; Stanford University Graduate School of Business Research Paper No. 15-18. Available at SSRN:

David F. Larcker (Contact Author)

Stanford University - Graduate School of Business ( email )

Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-6159 (Phone)

Brian Tayan

Stanford University - Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

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