The American Federation of State, County and Municipal Employees (AFSCME) analyzed 26 of the largest mutual fund families' voting patterns on compensation proposals in 2010 and released a new report this week, naming Vanguard as the mutual fund industry's greatest "Pay Enabler."
"Tipping the Balance? Large Mutual Funds' Influence upon Executive Compensation" revealed the largest mutual funds – including Vanguard, BlackRock, ING and Lord Abbett – are the least likely to use proxy votes to align executive pay with performance. On the other hand, the report finds that many smaller funds tend to vote "against" management-initiated compensation proposals, and "for" shareholder Say on Pay proposals.
Unfortunately, the group says, the pay-enabling influence of the larger mutual fund families greatly outweighs the impact of smaller funds.
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