May 20, 2011
AFSCME Study: Vanguard Tops List of Excessive CEO Pay Enablers
– Broc Romanek, CompensationStandards.com
Earlier this week, the American Federation of State, County, and Municipal Employees released its annual report regarding how mutual funds vote on compensation agenda items. The report reviews how 26 large fund groups voted on 10 specific items, including the voluntary “say on pay” votes at Motorola and Occidental Petroleum, compensation committee members at Nabors and Abercrombie & Fitch, and a shareholder proposal to end “golden coffin” benefits at Verizon Communications. The report doesn’t include any 2011 votes, as mutual funds aren’t required to disclose those votes until this August.
As noted in their press release, the report criticizes four mutual fund groups as “pay enablers” (Vanguard, BlackRock, ING and Lord Abbett). On average, these four fund groups supported over 90 percent of management proposals. In comparison, AFSCME praises four other fund families for being “pay constrainers” (Dimensional, Dreyfus, Oppenheimer and Wells Fargo).