A look at the proxy voting patterns of mutual fund companies in 2006 by The Corporate Library shows that they continue to vote overwhelmingly in favor of management proposals and typically shun shareholders’ ideas, The Wall Street Journal reports. Most tellingly, a majority of funds, 65%, have opposed shareholder proposals this year to limit executive pay.
Critics continue to charge that they do so in order to curry the favor of companies whose retirement plans they run or hope to run, and fund companies continue to retort that is not the case. If they vote along with management, they reason, it’s because they have bought shares in a company they already believe in.
But Corporate Library found, for example, that 98% of the time, Federated Investors voted in favor of management proposals and always against those proposed by shareholders.
Other fund companies, it appears, such as Charles Schwab, tend to vote consistently on principals rather than whether the resolution is from shareholders or management.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.