Proxy fight or proxy battle is an event that may occur when a corporation's stockholders develop opposition to some aspect of the corporate governance, often focusing on directorial and management positions. Corporate activists may attempt to persuade shareholders to use their proxy votes (i.e. votes by one individual or institution as the authorized representative of another) to install new management for any of a variety of reasons. Shareholders of a public corporation may appoint an agent to attend shareholder meetings and vote on their behalf. That agent is the shareholder's proxy.[1]
In a proxy fight, incumbent directors and management have the odds stacked in their favor over those trying to force the corporate change. Many tactics are used by these incumbents to stay in power; including staggering the boards (i.e. having different election years for different directors), access to the corporation's money, and creating restrictive requirements in the bylaws. As a result, most proxy fights are unsuccessful. However, it has been recently noted that proxy fights waged by hedge funds, which are virtually unregulated, are successful more than 60% of the time[citation needed].
The use of proxies is highly regulated by both federal law (through the oversight of the SEC) and state law, often resulting in serious concerns of federalism
