Annual meeting refers to the shareholders' general meeting held yearly on the date or according to the formula by which such a meeting date will be fixed, as prescribed in the corporation's bylaws. The purpose of the annual meeting is for shareholders to elect the directors. Therefore, holders of voting stock elect either the whole board of directors when there is a single class of directors or some fraction of the board in, for example, staggered boards. During the annual meeting shareholders also vote on the approval of the annual financial statements of the company. Additionally, shareholders may also consider and vote on other matters of the corporation, such as amending the bylaws, adopting shareholder resolutions to ratify board actions, or requesting the board to take action when the company's business is underperforming.
Commonly, in large public corporations, the shareholders cast a proxy vote. Therefore, the company must file proxy statements with the Securities and Exchange Commission (SEC), specifying, among others, the date, time, and location of the annual meeting, the names of the nominated candidates for the board of directors, and information about the compensation of directors and executives.
[Last updated in November of 2021 by the Wex Definitions Team]