I regularly get proxy statements asking for my vote in company matters. The idea as I understand it is that I would do research and play my role in corporate democracy.

My actual sentiment is that I have no interest in doing this research, and even if I did, I would doubt the quality of my decision anyway. I do have some ethical sentiments, particularly reading what people like Carl Icahn have written, that some battles on the corporate executive level may require, for instance, that a majority of voting power for a change, versus a majority of the votes cast. Alternatively, there has been concern in the past with broker-dealers casting votes on behalf of their clients (when the clients don't cast it). Since my general image of financial services includes plenty of people spending their career trying to come up with ways to game the system, I have no hesitation in believing that manipulation of elections happens and that either my vote or my lack of voting would aid those efforts against my intentions.

I would be perfectly happy to declare myself a non-participant, but I have concerns that the form of non-participation of throwing the proxy in the trash may functionally advantage the entrenched forces. What is the best thing for someone who would rather forfeit their vote to do?

3 Answers 3


You own a fractional share of the company, maybe you should care enough to at least read the proxy statements which explain the pro and con position for each of the issues you are voting on. That doesn't seem like too much to ask.

On the other hand, if you are saying that the people who get paid to be knowledgeable about that stuff should just go make the decisions without troubling you with the details, then choose the option to go with their recommendations, which are always clearly indicated on the voting form. However, if you do this, it might make sense to at least do some investigation of who you are voting onto that board.

I guess, as mpenrow said, you could just abstain, but I'm not sure how that is any different than just trashing the form.

As for the idea that proxy votes are tainted somehow, the one missing piece of that conspiracy is what those people have to gain. Are you implying that your broker who has an interest in you making money off your investments and liking them would fraudulently cast proxy votes for you in a way that would harm the company and your return? Why exactly would they do this?

I find your stance on the whole thing a bit confusing though. You seem to have some strong opinions on corporate Governance, but at the same time aren't willing to invest any effort in the one place you have any control over the situation. I'm just sayin....


Per the following information from the SEC Website, it looks like the meaning of a proxy vote can vary depending on the mechanics of the specific issue you are voting on. My emphasis added.

What do "for," "against," "abstain"and "withhold" mean on the proxy card or voter instruction form?
Depending on what you are voting on, the proxy card or voting instruction form gives you a choice of voting "for," "against," or "abstain," or "for" or "withhold." Here is an explanation of the differences:

Election of directors: Generally, company bylaws or other corporate documents establish how directors are elected. There are two main types of ways to elect directors: plurality vote and majority vote.

A "plurality vote" means that the winning candidate only needs to get more votes than a competing candidate. If a director runs unopposed, he or she only needs one vote to be elected, so an "against" vote is meaningless. Because of this, shareholders have the option to express dissatisfaction with a candidate by indicating that they wish to "withhold" authority to vote their shares in favor of the candidate. A substantial number of "withhold" votes will not prevent a candidate from getting elected, but it can sometimes influence future decisions by the board of directors concerning director nominees.

A "majority vote" means that directors are elected only if they receive a majority of the shares voting or present at the meeting. In this case, you have the choice of voting "for" each nominee, "against" each nominee, or you can "abstain" from voting your shares. An "abstain" vote may or may not affect a director's election. Each company must disclose how "abstain" or "withhold" votes affect an election in its proxy statement. This information is often found toward the beginning of the proxy statement under a heading such as "Votes Required to Adopt a Proposal" or "How Your Votes Are Counted."

Proposals other than an election of directors: Matters other than voting on the election of directors, like voting on shareholder proposals, are typically approved by a vote of a majority of the shares voting or present at the meeting. In this situation, you are usually given the choice to vote your shares "for" or "against" a proposal, or to "abstain" from voting on it. Again, the effect of an "abstain" vote may depend on the specific voting rule that applies. The company's proxy statement should again disclose the effect of an abstain vote.

  • IS abstaining the same as trashing the form? If someone answers that I'll set it as the accepted answer. I don't strongly believe that collusion is occurring, but I hear people make convincing points about problems with our corporate leadership all the time, I fear that the wrong kind of abstention can be an impediment to change that is an important part of the capitalistic cycle.
    – AlanSE
    Jun 28, 2011 at 19:40
  • @Zassounotsukushi I tried to answer this for you by editing my answer.
    – mpenrow
    Jun 28, 2011 at 20:27
  • Still researching the abstain versus not voting issue. But I found (and updated my answer) with some info from the SEC on the mechanics of the abstain votes.
    – JohnFx
    Jun 28, 2011 at 20:28
  • It seems like the answer is it depends. Each company and even each proposal could be different.
    – mpenrow
    Jun 28, 2011 at 20:30
  • @mpenrow That was my take too.
    – JohnFx
    Jun 28, 2011 at 20:31

Whether or not you want to abstain or throw away the proxy, one reason it's important to at least read the circular is to find out if any of the proposals deal with increasing the company's common stock. When this happens, it can dilute your shares and have an effect on your ownership percentage in the company and shareholder voting control.


On most proxy statements (all I have ever received) you have the ability to abstain from voting. Just go down the list and check Abstain then return the form. You will effectively be forfeiting your right to vote.


According to this, after January 1, 2010 abstaining and trashing the voting materials are the same thing. Prior to January 1, 2010 your broker could vote however they wanted on your behalf if you chose not to vote yourself. The one caveat is this seems to only apply to the NYSE (unless I am reading it wrong). So not sure about stocks listed on the NASDAQ.

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