Every publicly held company based in the United States must hold an annual meeting of its shareholders. Since corporations are established under state law, the specific requirements for such meetings depend on the state where the company is incorporated. Most states, however, follow the same rules. In addition, federal securities regulations and stock market listing rules impose a degree of uniformity on public companies' meetings.
The Model Corporations Act
More than 30 states have adopted a uniform law called the Model Business Corporations Act to oversee the activities of corporations. The American Bar Association, which drafted the act, says that many other states have enacted at least some portions of it or have laws that closely follow its provisions. That makes the act more or less the standard for corporate law at the state level.
Location of Meeting
Every state requires public companies to hold an annual meeting. Under the Model Business Corporations Act, a meeting does not have to be held in the state where the company is incorporated. It does, however, have to be held in accordance with the company's corporate bylaws, which typically identify where and when a meeting will take place -- or at least outline the process of picking a time and place. If there's nothing in the bylaws, the meeting must be held at the company's headquarters. Both the New York Stock Exchange and the Nasdaq require that companies listed on those exchanges hold meetings at least once per fiscal year.
A public company must give its shareholders adequate notice of where and when the meeting will be held. The Model Business Corporations Act says shareholders should be notified of the meeting at least 10 days but no more than 60 days ahead of time. Only shareholders who own voting stock must be notified, so holders of preferred shares (which are typically non-voting) might not be notified. The company must also announce a "record date," the date upon which you must be listed as a shareholder in order to have a vote at the meeting.
Business to Conduct
In most cases, the only order of business required by law at an annual meeting is an election for the board of directors. The board usually presents its favored candidates (including incumbents), and shareholders can nominate alternative candidates. The corporate bylaws may spell out other details, such as the format for the meeting, how the agenda will be determined and disseminated, whether shareholders will be allowed to speak and how issues can be placed before the shareholders for a vote.
It's unlikely that all shareholders of a public company will be able to attend the annual meeting. So corporations allow shareholders to cast their votes by proxy -- that is, let another shareholder or the company itself cast their votes for them. Proxy voting falls under federal regulations, which require that shareholders be given certain information before an annual meeting where proxy voting will be allowed. This includes information about candidates and issues that will be voted on, information on the compensation given to the company's top executives and directors, and a report from the company's audit committee. Shareholders must also receive an annual report that includes the company's audited financial statements.