Glossary term
Annual General Meeting (AGM)
Subject: Governance, Corporate Governance
An annual general meeting is the yearly meeting where shareholders receive the accounts, vote on matters such as electing directors, appointing the auditor and pay policy, and question the board.
Explanation
Company law or listing rules normally require the meeting within a set period after the financial year ends. Notice goes to shareholders in advance with the agenda and resolutions. Typical business includes approving the annual report, declaring a dividend, electing or re-electing directors, appointing the auditor and, in some countries, voting on executive pay. Shareholders who cannot attend may vote by proxy or electronically. The chair runs the meeting and directors, including committee chairs, should answer questions. It is the main time each year when owners can hold the board to account face to face, though turnout is often low and large investors may already have voted by proxy. Large votes against a resolution tell the board, in public, how far investors will go along with it.
Example
At a listed company's AGM, 38% of shareholders vote against the proposed executive pay policy after a year of falling profits. The vote is advisory, but the chair promises to meet major investors. The remuneration committee returns with a lower bonus cap and stronger links to results, and reports the changes at the next meeting.
Not to be confused with
- Extraordinary general meeting
- An extraordinary meeting is called between annual meetings for a specific urgent matter. The AGM is a regular yearly event.