The Microcap Minute Classroom. Module 4, chapter 3: The proxy statement DEF 14A: pay, owners and power <div class="learn" markdown="1"> <h2>What you will learn</h2> <ul> <li>What a proxy statement is and why it exists</li> <li>Where to find pay, owners, and power inside it</li> <li>What "say on pay" means, and what it cannot do</li> <li>Why the DEF 14A is a once-a-year goldmine</li> </ul> </div> In India you know the idea of a promoter: the family or founder who really runs a company. America mostly has no promoters. So who actually runs a US company, who owns it, and how much do the bosses pay themselves? One document answers all three questions, once a year: the proxy statement, form DEF 14A. Think of a school's annual day, where parents vote for the managing committee. A parent who cannot attend can hand their vote to someone they trust. That stand-in voter is called a "proxy". Before the meeting, every parent receives a booklet listing what will be voted on and who is standing. The DEF 14A is that booklet. "DEF" means definitive, the final version (early drafts are called PRE 14A). By law, a listed company must send it to shareholders before the annual meeting, the yearly gathering where owners vote. Apple filed its 2026 proxy on January 8, 2026, ahead of its February 2026 meeting. Now for the three treasures inside. ## Treasure 1: pay The proxy must show, in dollars, what each top executive earned: salary, cash bonus, and stock awards (shares given as pay). Apple's 2026 proxy shows Tim Cook's stock awards for 2025 had target values of $37.5 million tied to Apple's performance and $12.5 million tied to simply staying (together about Rs 435 crore). The proxy must even compare CEO pay with the median employee, the middle person if everyone stood in a line by salary. Apple's ratio for 2025 was 533 to 1. ## Treasure 2: owners One table lists everyone who owns 5% or more of the company, plus every director and officer. In Apple's 2026 proxy: Vanguard holds about 9.6% and BlackRock about 7.1%. No single person controls Apple; two giant fund houses are its biggest voices. Tim Cook owned about 3.3 million shares: a fortune for a person, a rounding error next to the funds. ## Treasure 3: power The first pages list exactly what owners will vote on: electing directors (the board, meaning the bosses' bosses), approving the auditor (the outside accountant who checks the books), "say on pay" (an advisory vote on executive pay; advisory means it forces nothing, but boards hate losing it), and shareholder proposals (ideas sent in by owners, which the company usually recommends voting against). ## When the booklet turns dramatic Two special versions are worth knowing by name. When the vote is about a merger or a big sale, the booklet is a DEFM14A, the merger proxy, carrying the full deal terms owners must approve. When an outsider fights to throw out directors, both sides file contested proxies marked with a C, like DEFC14A. That is a proxy fight: an election campaign for control of the company. Notice the items of business on the first pages: that short list is the entire meeting, and every big fund in the world votes on it. Notice the DEF 14A appears once a year, a few weeks before the annual meeting: it is worth setting a reminder for. <div class="try" markdown="1"> <h2>Try it yourself</h2> <p>Open <a href="https://www.sec.gov/Archives/edgar/data/320193/000130817926000008/aapl014016-def14a.htm">Apple's 2026 DEF 14A</a>. Find the Summary Compensation Table and write down the CEO's total pay for the latest year. Then find the ownership table: who owns more than 5%? Finally, count how many shareholder proposals owners are voting on. Fifteen minutes, one document, three answers.</p> </div> <div class="takeaways" markdown="1"> <h2>Key takeaways</h2> <ul> <li>DEF 14A is the once-a-year voting booklet: pay, owners, and power in one place.</li> <li>The pay table shows exactly what the top bosses earned, in dollars, piece by piece.</li> <li>The ownership table shows where the votes, and so the real power, sit.</li> <li>Say on pay is advice, not an order; a big "against" vote is still a warning sign.</li> <li>None of this says buy or sell: it tells you who runs the show and how they are rewarded.</li> </ul> </div> ## Read one real thing [Apple's 2026 DEF 14A](https://www.sec.gov/Archives/edgar/data/320193/000130817926000008/aapl014016-def14a.htm). Read only the first two pages, the notice of meeting and items of business. That short list is the whole meeting, and everything after it is detail.. I am Ritu, a synthetic voice, and the words I am reading are Ayush Agrawal's.

# The proxy statement DEF 14A: pay, owners and power <div class="learn" markdown="1"> <h2>What you will learn</h2> <ul> <li>What a proxy statement is and why it exists</li> <li>Where to find pay, owners, and power inside it</li> <li>What "say on pay" means, and what it cannot do</li> <li>Why the DEF 14A is a once-a-year goldmine</li> </ul> </div> In India you know the idea of a promoter: the family or founder who really runs a company. America mostly has no promoters. So who actually runs a US company, who owns it, and how much do the bosses pay themselves? One document answers all three questions, once a year: the proxy statement, form DEF 14A. Think of a school's annual day, where parents vote for the managing committee. A parent who cannot attend can hand their vote to someone they trust. That stand-in voter is called a "proxy". Before the meeting, every parent receives a booklet listing what will be voted on and who is standing. The DEF 14A is that booklet. "DEF" means definitive, the final version (early drafts are called PRE 14A). By law, a listed company must send it to shareholders before the annual meeting, the yearly gathering where owners vote. Apple filed its 2026 proxy on January 8, 2026, ahead of its February 2026 meeting. Now for the three treasures inside. ## Treasure 1: pay The proxy must show, in dollars, what each top executive earned: salary, cash bonus, and stock awards (shares given as pay). Apple's 2026 proxy shows Tim Cook's stock awards for 2025 had target values of $37.5 million tied to Apple's performance and $12.5 million tied to simply staying (together about Rs 435 crore). The proxy must even compare CEO pay with the median employee, the middle person if everyone stood in a line by salary. Apple's ratio for 2025 was 533 to 1. ## Treasure 2: owners One table lists everyone who owns 5% or more of the company, plus every director and officer. In Apple's 2026 proxy: Vanguard holds about 9.6% and BlackRock about 7.1%. No single person controls Apple; two giant fund houses are its biggest voices. Tim Cook owned about 3.3 million shares: a fortune for a person, a rounding error next to the funds. ## Treasure 3: power The first pages list exactly what owners will vote on: electing directors (the board, meaning the bosses' bosses), approving the auditor (the outside accountant who checks the books), "say on pay" (an advisory vote on executive pay; advisory means it forces nothing, but boards hate losing it), and shareholder proposals (ideas sent in by owners, which the company usually recommends voting against). ## When the booklet turns dramatic Two special versions are worth knowing by name. When the vote is about a merger or a big sale, the booklet is a DEFM14A, the merger proxy, carrying the full deal terms owners must approve. When an outsider fights to throw out directors, both sides file contested proxies marked with a C, like DEFC14A. That is a proxy fight: an election campaign for control of the company. Notice the items of business on the first pages: that short list is the entire meeting, and every big fund in the world votes on it. Notice the DEF 14A appears once a year, a few weeks before the annual meeting: it is worth setting a reminder for. <div class="try" markdown="1"> <h2>Try it yourself</h2> <p>Open <a href="https://www.sec.gov/Archives/edgar/data/320193/000130817926000008/aapl014016-def14a.htm">Apple's 2026 DEF 14A</a>. Find the Summary Compensation Table and write down the CEO's total pay for the latest year. Then find the ownership table: who owns more than 5%? Finally, count how many shareholder proposals owners are voting on. Fifteen minutes, one document, three answers.</p> </div> <div class="takeaways" markdown="1"> <h2>Key takeaways</h2> <ul> <li>DEF 14A is the once-a-year voting booklet: pay, owners, and power in one place.</li> <li>The pay table shows exactly what the top bosses earned, in dollars, piece by piece.</li> <li>The ownership table shows where the votes, and so the real power, sit.</li> <li>Say on pay is advice, not an order; a big "against" vote is still a warning sign.</li> <li>None of this says buy or sell: it tells you who runs the show and how they are rewarded.</li> </ul> </div> ## Read one real thing [Apple's 2026 DEF 14A](https://www.sec.gov/Archives/edgar/data/320193/000130817926000008/aapl014016-def14a.htm). Read only the first two pages, the notice of meeting and items of business. That short list is the whole meeting, and everything after it is detail.

That was chapter 3 of module 4. The text, the pictures and the exercise are on the lesson page. Thank you for listening.