Funds vote mostly no on shareholder proxies
By Muralikumar Anantharaman
BOSTON (Reuters) - U.S. mutual fund families oppose most shareholder-sponsored proposals on executive pay and other corporate governance issues and overwhelmingly side with management in voting on company resolutions, a study found.
About 90.7 percent of management proposals was supported by 54 fund groups including Fidelity Investments and Vanguard Group for the year ended June 30, 2007 against the 35.2 percent of shareholder proposals they supported, according to FundVotes.com, an online fund voting analysis project.
While the support for management proposals declined slightly for the latest period from 91.3 percent in the year ended June 30, 2006, support for shareholder proposals fell more -- from 38.2 percent in the previous year, the study showed.
The percentage of shareholder proposals that the funds abstained from voting grew to 4.8 percent from 3.4 percent, the study showed.
"The data doesn't leave us very encouraged. I don't think funds are becoming more activist," Jackie Cook, founder of Vancouver-based FundVotes.com, told Reuters on Monday. The study was based on regulatory filings and will be posted online soon, Cook said.
Mainstream funds -- excluding socially responsible funds such as Calvert and Domini Social Investments -- are supportive of shareholder resolutions even less, backing just 30.9 percent of them in the latest period while supporting 92.7 percent of management proposals, the study showed.
The data comes just a week after leading mutual funds research firm Morningstar said that very few funds put their investors first and many lag in governance rankings because of weaker boards or corporate culture.
