Recently I read an article about share holders at various companies
voting on proposals requiring candidate board members to have majority
of the votes to be elected. Vanguard and some other large mutual funds
voted against!!. Does anyone know why ?. Cheers Lon
It's because Vanguard has a 'unique structure'. The shareholders own the
funds and the funds own the company.
I have a great bridge in New England and it's for sale. Interested?
"L" <> wrote in message
news:5FW%e.7514$
> Recently I read an article about share holders at various companies voting
> on proposals requiring candidate board members to have majority of the
> votes to be elected. Vanguard and some other large mutual funds voted
> against!!. Does anyone know why ?. Cheers Lon
L wrote:
>
> Recently I read an article about share holders at various companies
> voting on proposals requiring candidate board members to have majority
> of the votes to be elected. Vanguard and some other large mutual funds
> voted against!!. Does anyone know why ?. Cheers Lon
Given the timing of your post, I'm guessing that you are referring to
Gretchen Morgenson's opinion piece in today's NYTimes. (It really helps
if you provide a citation, let alone a link, so we have some more
context.)
Recognize that Morgenson is an opinion writer, though one whose column
appears on the first page of the business section without being labeled
as opinion or news analysis". (I'm looking at Section 3, p. 1 as I
write this.) You have to read her carefully to sort out the innuendo
from the facts.
For instance, while she acknowledges that Fidelity takes this issue on a
case by case basis, she gives multiple examples where Fidelity has voted
against requiring majority approval of board candidates. This leaves
the reader with the clear implication that Fidelity's claim of
"case-by-case treatment" is a mere formality; that in reality Fidelity
*always* votes against such proposals.
The truth is that although Fidelity does almost always does vote this
way, it really does take these proposals case by case. The WSJ, in its
Sept. 15th Fund Track column notes one occasion that Fidelity voted to
support such a proposal.
(Free reprint of WSJ column at:
)
She poo-poos Vanguard's explanation for its current position ("listen to
.... Vanguard ... try [to talk its way out of this]"). But the WSJ
column notes that Vanguard is serious - it are seeking legal opinions
(e.g. an American Bar Association report) to make sure that such
proposals are well-designed. I don't have a problem with that.
To go further, if Vanguard were in favor of automatic board approval,
then why would it have supported the full board in only 29% of its votes
last year?
--
Mark Freeland
Mark Freeland wrote:
>
> L wrote:
> >
> > Recently I read an article about share holders at various companies
> > voting on proposals requiring candidate board members to have
> > majority of the votes to be elected. Vanguard and some other large
> > mutual funds voted against!!. Does anyone know why ?. Cheers Lon
>
> Given the timing of your post, I'm guessing that you are referring to
> Gretchen Morgenson's opinion piece in today's NYTimes.
If you are really serious about being interested in majority board
elections, then you'll find a fair 10 paragraph intro at:
(Institutional
Shareholder Services - ISS)
It has a link to a 30 page white paper that goes into the details of the
issues involved. A brief skimming suggests that it is pretty
comprehensive. It gives a bit more detail about the reports that
Vanguard is waiting for before taking a more aggressive position.
Be advised, however, that Morgenson does not consider ISS trustworthy
(even though on balance it supports majority elections).
(Morgenson article )
(ISS letter in response)
--
Mark Freeland