Annual General Meeting (AGM)

By JAMES CHEN
Updated Jun 17, 2019
What Is an Annual General Meeting (AGM)?
An annual general meeting (AGM) is a mandatory yearly gathering of a company's
interested shareholders. At an AGM, the directors of the company present an annual
report containing information for shareholders about the company's performance and
strategy.

Shareholders with voting rights vote on current issues, such as appointments to the
company's board of directors, executive compensation, dividend payments, and the
selection of auditors.

KEY TAKEAWAYS
Shareholders who do not attend the meeting in person may usually vote by proxy,
which can be done online or by mail.
At an AGM, there is often a time set aside for shareholders to ask questions to the
directors of the company.
Activist shareholders may use an AGM as an opportunity to express their concerns.
How an Annual General Meeting Works
An annual general meeting, or annual shareholder meeting, is primarily held to
allow shareholders to vote on both company issues and the selection of the
company's board of directors. In large companies, this meeting is typically the
only time during the year when shareholders and executives interact.

The exact rules governing an AGM vary according to jurisdiction. As outlined by

many states in their laws of incorporation, both public and private companies must
hold AGMs, though the rules tend to be more stringent for publicly traded
companies.

Public companies must file annual proxy statements, known as Form DEF 14A, with the
Securities and Exchange Commission (SEC). The filing will specify the date, time,
and location of the annual meeting, as well as executive compensation and any
material matters of the company concerning shareholder voting and nominated
directors.

If a company needs to resolve a problem between annual general meetings, it may

call an extraordinary general meeting.
Qualifications for an Annual General Meeting
The corporate bylaws that govern a company, along with its jurisdiction,
memorandum, and articles of association, contain the rules governing an AGM. For
example, there are provisions detailing how far in advance shareholders must be
notified of where and when an AGM will be held and how to vote by proxy. In most
jurisdictions, the following items, by law, must be discussed at an AGM:

Minutes of the previous meeting: The minutes of the previous year's AGM must be
presented and approved.
Financial statements: The company presents its annual financial statements to its
shareholders for approval.
Ratification of the director's actions: The shareholders approve and ratify (or
not) the decisions made by the board of directors over the previous year. This
often includes the payment of a dividend.
Election of the board of directors: The shareholders elect the board of directors
for the upcoming year.
Special Considerations
Several other elements may be added to an AGM agenda. Often, the company's
directors and executives use an AGM as their opportunity to share their vision of
the company's future with the shareholders. For example, at the AGM for Berkshire
Hathaway, Warren Buffett delivers long speeches on his views of the company and the
economy as a whole.

The annual gathering has become so popular that it is attended by tens of thousands
of people each year, and it's been dubbed the "Woodstock for Capitalists."

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Related Terms
Why Companies Call Extraordinary General Meetings (EGM) Definition
An extraordinary general meeting is a way to meet and deal with urgent matters that
arise in the downtime between the company's annual shareholders meetings. more
Final Dividend
The final dividend is declared at a company's annual general meeting for the year.
This amount is calculated after all financial statements are recorded. more
Information Circular
An information circular is a document for a company�s shareholders, outlining
important matters on the agenda at the annual shareholders' meeting, or at a
special shareholders' meeting. more
What Is a Ballot?
A ballot is a document that a shareholder of a company fills in to vote on
corporate matters contained in a proxy filing for the annual meeting. more
Board of Directors (B of D)
A board of directors is a group of individuals elected to represent shareholders
and establish and support the execution of management policies. more
Shareholders Should Cast Their Votes by Proxy and Be Heard
If you are unable to attend your company's annual general meeting, consider using a
proxy to represent you. more