We've got to hand it to the board of directors at AIM Investments for acting responsibly and in direct response to a profound change in public sentiment.

Reacting to accusations by a labor group that it is one of the most egregious fund companies when it comes to voting in line with management, particularly on executive pay, AIM's board set up a proxy voting committee last year to overhaul its policies.

We've said before that it will take some time for special-interest groups and the public to begin to scrutinize the proxy voting records that the Securities and Exchange Commission began requiring fund companies to make public in 2003-but that such scrutiny is inevitable.

The early results of AIM's 2007 corporate election proxy voting records appear to indicate the changes have made a real and significant difference. Of the roughly 1,000 votes AIM cast, it voted against management recommendations at least once 45% of the time, and against all of management recommendations, 15% of the time.

"There was a sense that the process was routine as opposed to being vigilant," Bruce Crockett, chairman of the AIM Funds board told The Wall Street Journal.

"There was also concern that shareholders were becoming more vigilant about corporate governance, so something had to be done. The policies needed to be completely reworked from top to bottom," added Donna Anderson, chairwoman of the proxy voting committee.

As a result of the changes, AIM is now scrutinizing severance packages and executive pay more closely and voting more often against staggered boards as opposed to voting in completely new slates every year.

The American Federation of State, County and Municipal Employees, in conjunction with The Corporate Library, examined the 2006 proxy voting records on executive pay measures for 29 mutual fund families and concluded that AIM, AllianceBernstein and Barclays Global Investors were "pay enablers." The study found that while the fund companies voted in favor of management-proposed executive compensation recommendations 74% of the time-AIM voted in support of such proposals 91.1% of the time.

We've said it before and we'll undoubtedly say it again: The day of proxy vote reckoning has finally come.

(c) 2007 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

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