A new report shows mutual funds as a group are increasingly taking the side of management when it comes to executive pay proposals.
The report from the AFSCME, The Corporate Library and the Shareowner Education Network is calling on the SEC to require mutual funds to distribute a Plain English report on proxy voting to investors. The report analyzed mutual fund voting patterns on compensation issues in 2007 and 2008.
“Given the performance of many companies, investors in mutual funds should be outraged that their assets are being used to prop up CEO pay that is too often undeserved and unearned,” said AFSCME International President Gerald W. McEntee. “The worst ranked funds are accomplices in the overpayment of CEOs. They should be protecting the assets of their clients by demanding that CEOs get paid for performance, rather than supporting runaway pay.”
The four worst offenders, according to the report, are AllianceBernstein, Ameriprise Financial, Barclays Global Investors and Columbia Management. AllianceBernstein was the worst, supporting management compensation proposals more than 90 percent of the time while its support for shareholder proposals decreased to 2 percent.