Proxy Statement & Annual Report Flashcards
7 cards from real CIRO practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Proxy Statement & Annual Report flashcards as text
What is the 'pay ratio' disclosure requirement under the Dodd-Frank Act?
Answer: The ratio of CEO pay to that of the median employee
Dodd-Frank Section 953(b) requires companies to disclose the ratio of the CEO's annual total compensation to that of the median annual total compensation of all employees.
When must a company file a Form 8-K to announce its annual meeting date if it differs significantly from the prior year?
Answer: Within 4 business days of setting the new meeting date
If the annual meeting date changes by more than 30 days from the prior year, the company must file a Form 8-K announcing the new record date within 4 business days of setting it.
What is a 'no-action letter' in the context of shareholder proposals?
Answer: An SEC staff response indicating it will not recommend enforcement action if the company excludes a shareholder proposal
A no-action letter is issued by SEC staff indicating they will not recommend action against a company for excluding a shareholder proposal under Rule 14a-8.
Under Rule 14a-8, what minimum ownership threshold must a shareholder meet to submit a proposal for inclusion in the proxy statement?
Answer: $2,000 of company stock for 3 years, or $15,000 for 2 years, or $25,000 for 1 year
Under updated SEC rules effective 2022, shareholders must hold at least $2,000 worth of securities for 3 years, $15,000 for 2 years, or $25,000 for 1 year to submit a proposal.
What does 'majority voting' mean in the context of director elections?
Answer: Directors must receive more 'for' votes than 'withheld' or 'against' votes to be elected
Under majority voting standards, a director nominee must receive more votes in favor than against (or withheld) from votes actually cast to be elected.
What is the purpose of the 'Selected Financial Data' section that was previously required in annual reports?
Answer: To provide five-year summary financial data highlighting key trends
The Selected Financial Data section (eliminated for most companies in 2021 but historically required) provided a five-year summary of key financial metrics to help investors spot trends.
In the context of annual reports, what does 'internal control over financial reporting' (ICFR) refer to?
Answer: Management's framework to provide reasonable assurance that financial statements are accurately prepared
ICFR is a process designed by management to provide reasonable assurance that financial reporting is reliable and prepared in conformity with GAAP, as required by Sarbanes-Oxley Section 404.