What is Annual General Meeting ?

1443 reads · Last updated: December 5, 2024

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 formal meeting that a company must hold each year, where shareholders listen to the management's report on the past year's performance and future plans. Shareholders review and vote on major company issues, including board elections, executive compensation plans, profit distribution policies, and the appointment of external auditors.

Origin

The concept of the AGM originates from the fundamental principles of corporate governance, aimed at ensuring shareholders can participate in company decisions and oversee management performance. With the development of corporate law, the AGM has become a legally mandated part of corporate governance structures.

Categories and Features

AGMs are typically categorized into two types: physical meetings and virtual meetings. Physical meetings are held at a specific location where shareholders can attend in person, while virtual meetings are conducted online, allowing remote participation. Both types provide opportunities for shareholder-management communication and influence company decisions through voting mechanisms.

Case Studies

For example, Apple Inc. holds its AGM typically at the beginning of each year, where shareholders discuss the company's financial performance, product innovation, and future strategies. Another example is Berkshire Hathaway, whose AGM is known as the "Woodstock for Capitalists," attracting global investors to discuss topics such as investment strategies and corporate governance.

Common Issues

Common issues investors face when participating in AGMs include how to effectively exercise voting rights, how to access meeting materials, and how to understand the meeting agenda. It is generally recommended that investors read the company's annual report and meeting materials in advance to make informed decisions during the meeting.

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