To voice its dissatisfaction with extraordinarily high executive severance packages and director absenteeism, Fidelity’s votes against trustee nominations have increased from 5% in 2006 to 13%, Bloomberg reports. Fidelity withheld votes for at least one director at 229 companies this year, compared with 70 in 2006. Besides protesting excessive golden parachutes, Fidelity withheld votes for directors who failed to attend 75% of board meetings.
The increase comes as a result of a
A “factor that may have increased withhold votes is based on changes to disclosure rules by the SEC,” said a Fidelity spokesman. “There is now more information available to assess our guidelines related to golden parachutes.”
As a leading company in the industry, Fidelity, which heretofore hasn’t been know for taking a tough stance against boards, might inspire other fund companies to shore up their positions.
“Fidelity often is the single largest shareholder in public companies,” said Damon Silvers, associate general counsel for the
Mutual fund companies have overwhelmingly sided with management on board nominees, voting 93% of the time in favor of management’s choices, according to Jackie Cook, founder of
