Annual General Meeting
An annual general meeting (AGM) is a 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.
Definition: The Annual General Meeting (AGM) is a mandatory formal meeting held by a company each year, where shareholders listen to the management's report on the past year's performance and future development plans. Shareholders review and vote on major company matters, including the election of the board of directors, executive compensation plans, profit distribution policies, and the appointment of external auditors.
Origin: The concept of the AGM originated in the 19th century corporate law, first implemented in countries like the UK and the USA. As corporate governance structures improved, AGMs became a standard practice globally. The purpose is to ensure shareholders can participate in company decisions, oversee management actions, and protect shareholder rights.
Categories and Characteristics: AGMs typically fall into the following categories:
- Ordinary AGM: The most common form, covering topics such as reviewing annual financial reports, electing board members, and approving executive compensation.
- Extraordinary General Meeting (EGM): Held outside the regular AGM schedule to address urgent or special matters, such as major mergers or asset restructurings.
- Regularity: Held annually, usually within a few months after the end of the company's fiscal year.
- Transparency: Meeting content and resolutions must be disclosed to all shareholders, ensuring information transparency.
- Participation: Shareholders have the right to attend, express opinions, and vote on resolutions.
Case Studies:
- Case 1: At the AGM of a large tech company, shareholders voted on whether to approve a new executive compensation plan. After intense discussion, the plan was narrowly approved, reflecting shareholders' trust and expectations of the management.
- Case 2: At the AGM of a manufacturing company, shareholders reviewed and approved a major acquisition plan. This acquisition successfully expanded the company's market share and enhanced its competitiveness.
Common Questions:
- Do shareholders have to attend the AGM in person? Not necessarily. Shareholders can participate through proxies or online voting.
- Are AGM resolutions legally binding? Yes, AGM resolutions are legally binding on the company and must be executed.
