In a scandal that has turned many in the mutual fund industry into seekers of transparency, some firms are now saying that duct tape, and not scotch tape, should be used to cover up the figures representing portfolio managers salaries. In short, they think that there should still be some limit to disclosure, Reuters reports.
Vanguard, the nations No. 1 fund firm, is one of those companies. "There is no advantage whatsoever to disclosing the compensation of portfolio managers," said Vanguard spokesman Brian Mattes.
While the Securities and Exchange Commission has proposed increased disclosure of fees and compensation, it has not lobbied for any type of manager salary transparency. For some, that is a problem.
Former SEC staffer Mercer Bullard, who now teaches securities law at the University of Mississippi, said, "The companies may be private, but the funds are public, and therefore, portfolio managers salaries should be disclosed."
Mattes said that while he does believe investors should understand the structure of compensation, they have no right knowing exactly what it adds up to. Fidelity Investments agrees.
Amid the mutual fund industry scandal, the issue has become more pressing. Former Putnam manager Justin Scott made $14.3 million in 2000, and his colleague, Omid Kamshad, $8.7 million. Both went on to face allegations of improper trading in their funds.