Mutual fund complexes, which own more than 22% of U.S. corporate stocks, are the puppets of corporate bigwigs, and the relationship is harming shareholders, a new study from the Center for Political Accountability (CPA) claims.
According to the Washington lobbyist, 27 of 30 large mutual fund companies voted against political disclosure resolutions, a measure that's also traditionally opposed by corporate boards, for the second consecutive proxy season.
"Once again, the mutual funds failed to put the interests of their shareholders first," said Bruce Freed, co-director of the CPA, in a statement. "These resolutions would let shareholders know how companies are using their money politically and would hold management accountable for their company's political spending. These steps are essential for protecting shareholder value."
The top 30 mutual fund companies in the U.S. own, on average, 20% of the outstanding shares of the 22 companies that faced resolutions to disclose political donations made with corporate funds during the 2005 proxy season, according to the CFA. The study shows that the funds of 27 large fund complexes - including Franklin Templeton, Dreyfus, Charles Schwab, PIMCO and Fidelity - voted against disclosure requirements. Only three funds, all managed by Vanguard Group, abstained.