Shareholders are another name for the legal owners of a business. There are a few types of shareholders. Individual shareholders are people who directly own shares of stock issued by companies. These examples include: pension funds, mutual funds, insurance companies and university endowments. Shareholders have quite a few legal rights, such as:
- To share in the profits of the enterprise if directors declare dividends
- To receive annual reports of company earnings and company activities
- To inspect the corporate books
- To elect members of the board of directors
- To hold the directors and officers of the corporation responsible for their actions
- To vote on mergers, some acquisitions, and changes in the charter and bylaws
- To bring other business-related proposals before the stockholders
- To sell their stock
The board of directors are members that are elected by shareholders at the annual meeting, where absent owners vote by proxy. They vary in size, composition, and structure in order to best serve the interests of the corporation and shareholders. The board of directors is ultimately responsible for the companyâs business affairs and governance as stated in its governing documents, including the articles of incorporation, the by laws, and shareholder agreements.
Executive compensation is the financial payments and non-monetary benefits provided to high level management in exchange for their work on behalf of an organization. The types of employees that are typically paid with executive compensation packages include corporate presidents, chief executive officers, chief financial officers, vice presidents, managing directors and other senior executives.