The Advisors' Blog

Vanguard has adopted its 2025 voting policies for U.S. portfolio companies – thanks to Aon’s Karla Bos for alerting us to this release! Dave blogged yesterday on TheCorporateCounsel.net about the main updates, and this Reuters article also gives background.

There are no significant changes to Vanguard’s “executive pay” policies this year, although the updated policies do tighten the language in a few places, e.g.:

– Referring to “long-term returns” (rather than “long-term value”)

– In the context of assessing alignment between incentive targets & strategy, the language clarifies that the company sets its strategy

– Noting that, where pay-related proposals consistently receive low support, the funds look for boards to demonstrate “consideration of” shareholder concerns (rather than “responsiveness to” – although the “responsiveness” language still appears elsewhere, so don’t consider this a free pass to ignore feedback)

– For determining whether there is concern with a peer group, the policy clarifies that Vanguard is looking at whether the company’s disclosed peer group is not aligned with the company in size or sector

As Dave noted, the 2025 policies also take a more general approach to proposals, versus signaling how it will approach particular topics. Included on the cutting room floor is commentary about shareholder proposals that request disclosure of workforce demographics, such as EEO-1 reports. In addition, Vanguard eliminated a paragraph about its voting criteria for annual or long-term bonus plans and other proposals relating to executive pay – which had been similar to the say-on-pay & plan analysis disclosed elsewhere.

– Liz Dunshee