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Highlights
- Striking out adjournment wording limits proxy validity to the original meeting.
- Proxies with altered clauses can’t be used in postponed or reconvened sessions.
- This action may affect a shareholder’s influence on key decisions.
When shareholders are invited to participate in corporate governance through proxy voting, the language included in proxy cards plays a significant role in determining how and when votes may be counted. A common clause in proxy statements reads: “Shares will be voted at this annual meeting or at any adjournment thereof.” This clause ensures that if the annual meeting is adjourned and reconvened at a later time, the proxy remains valid and the shareholder’s vote is still counted.
However, there are cases where a securityholder may choose to strike out or remove this specific phrase. While such an action may appear harmless or even strategic in certain contexts, it carries significant implications. Once the clause referring to adjournment is removed, the proxy effectively loses its authority beyond the original meeting date. That means if the meeting is postponed or adjourned and reconvened later — for any reason — the proxy can no longer be used to represent the shareholder’s vote.
This limitation can be especially consequential in situations where important resolutions or contested matters are carried over to adjourned sessions. By striking the adjournment provision, a shareholder may inadvertently forfeit their voting rights during such critical follow-up meetings, weakening their position and potentially impacting the outcome of key corporate decisions.
Conclusion
Removing the adjournment clause from a proxy may seem minor, but it restricts the proxy’s usefulness to just the initial meeting. Shareholders should carefully consider the consequences before altering standard proxy language, as doing so could diminish their voice in ongoing corporate matters.
