What Happened to Proxy Voting?

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JPH
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What Happened to Proxy Voting?

Post by JPH »

I used to receive in the mail a proxy to vote my mutual fund shares at the annual meeting. I have not seen such a thing for several years now and was just wondering why.
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dm200
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Re: What Happened to Proxy Voting?

Post by dm200 »

JPH wrote:I used to receive in the mail a proxy to vote my mutual fund shares at the annual meeting. I have not seen such a thing for several years now and was just wondering why.
Not 100% sure, but my guess is that you would only get such a proxy notice if there were matters proposed or scheduled where such a vote may be needed. I (vaguely) recall a few years ago, there were some Vanguard fund changes proposed by Vanguard that required such a vote by many of the vanguard funds.
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Epsilon Delta
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Re: What Happened to Proxy Voting?

Post by Epsilon Delta »

Most mutual funds do not hold annual meetings.

Most of them only hold a meeting if some particular subject matter arises that requires shareholder approval. Otherwise they go about their year to year business without bothering the shareholders. :twisted:

Examples of things that may require shareholder approval include:
  • Reorganizing the fund, e.g. by incorporating in a different state, or perhaps merging
  • Changing fundamental investment objectives (see the prospectus).
  • Electing directors, once a certain fraction of directors are no longer elected by shareholders. (The board can apoint a few directors as seats becomes vacant but they can't do this indefinitely, sooner or later enough of the elected directors leave and the law forces a fresh election.)
Meetings are an expense, and in some cases they annoy management, so funds tend hold off as long as possible then put several issues to a meeting at once.
Last edited by Epsilon Delta on Tue Feb 14, 2017 5:33 pm, edited 1 time in total.
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JPH
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Re: What Happened to Proxy Voting?

Post by JPH »

Thanks for the replies. I'm not itching to vote on anything or see the proxies return. They were sort of a PITA, but I usually filled them all out and returned them. I recall that the shareholders had to approve the board of directors each year.
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ReadyOrNot
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Re: What Happened to Proxy Voting?

Post by ReadyOrNot »

Now that you point it out, I don't remember seeing such requests from TIAA or Vanguard for a few years, but used to get them pretty often in the mail. Do they still mail them out?
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Re: What Happened to Proxy Voting?

Post by JPH »

ReadyOrNot wrote:Now that you point it out, I don't remember seeing such requests from TIAA or Vanguard for a few years, but used to get them pretty often in the mail. Do they still mail them out?
Not to me. I'm wondering why they stopped sending those.
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Epsilon Delta
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Re: What Happened to Proxy Voting?

Post by Epsilon Delta »

Vanguard does not hold annual meetings. There was a Special Meeting of Shareholders on July 2, 2009. This was preceded by quite a few mailing etc. as Vanguard worked to get a quorum. This is what you are remembering.

It's anyones guess when the next special meeting will be. As I understand it currently 3 of the 10 members of the board are currently appointed by the board. This means if a one of 7 elected trustees leave they cannot be replaced. Given that many of the trustees are over 65 this may become an issue sometime in the next 20 years and force another special meeting,
malabargold
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Re: What Happened to Proxy Voting?

Post by malabargold »

It's been all electronic votes at our brokerages for
2 or 3 years
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Re: What Happened to Proxy Voting?

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Epsilon Delta wrote:Most mutual funds do not hold annual meetings.

Most of them only hold a meeting if some particular subject matter arises that requires shareholder approval. Otherwise they go about their year to year business without bothering the shareholders. :twisted:

Examples of things that may require shareholder approval include:
  • Reorganizing the fund, e.g. by incorporating in a different state, or perhaps merging
  • Changing fundamental investment objectives (see the prospectus).
  • Electing directors, once a certain fraction of directors are no longer elected by shareholders. (The board can apoint a few directors as seats becomes vacant but they can't do this indefinitely, sooner or later enough of the elected directors leave and the law forces a fresh election.)
Meetings are an expense, and in some cases they annoy management, so funds tend hold off as long as possible then put several issues to a meeting at once.
The few times I have gotten a proxy approving a change in fundamental objective I immediate voted no electronically. The next day I sold out my position JIC. :wink:
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Re: What Happened to Proxy Voting?

Post by obafgkm »

JPH wrote:I used to receive in the mail a proxy to vote my mutual fund shares at the annual meeting. I have not seen such a thing for several years now and was just wondering why.
Speaking of annual meetings, about 15 years ago I happened to be in Massachusetts at the time a meeting was scheduled (in Boston for one or more Fidelity funds). I thought it would be in a big room. It was in a small room, maybe four or five other fundholders were there, and the meeting ended quickly when there were not enough proxies sent in to make a quorum. :shock:
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Re: What Happened to Proxy Voting?

Post by Epsilon Delta »

Doc wrote: The few times I have gotten a proxy approving a change in fundamental objective I immediate voted no electronically. The next day I sold out my position JIC. :wink:
In 2009 every single Vanguard fund had a vote to change fundamental objectives. Did you sell out or did you sell out? :twisted:
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Re: What Happened to Proxy Voting?

Post by Doc »

Epsilon Delta wrote:
Doc wrote: The few times I have gotten a proxy approving a change in fundamental objective I immediate voted no electronically. The next day I sold out my position JIC. :wink:
In 2009 every single Vanguard fund had a vote to change fundamental objectives. Did you sell out or did you sell out? :twisted:
Good question. The answer is no. We had no Vg funds that changed their fundamental objective as I remember. In 2009 the only Vanguard funds we owned were S&P 500, REIT and a few of short and intermediate term bond funds. My IPS requires five years manager tenure to take a position in a fund and Vanguard's habit of changing indexes every few years kept most of Vg funds from passing the acceptance screen. (I consider an index change as a manager change.)

I did take a position in Vg small cap value a few years ago due to Hobson's choice but I got rid of most of it last week. Tax considerations keeps me from getting rid of all of it. There's nothing wrong with the fund other than the CRSP bogie having little history.
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Re: What Happened to Proxy Voting?

Post by Epsilon Delta »

Doc wrote:We had no Vg funds that changed their fundamental objective as I remember. In 2009 the only Vanguard funds we owned were S&P 500, REIT and a few of short and intermediate term bond funds.
Both the S&P 500 and REIT had proposals to change fundamental policies on the 2009 proxy. IIRC they passed.

IMHO while they were fundamental in a legal sense, the changes had no material effect on the desirability of the funds. The index changes for TSM etc., which are unquestionably more important, were not fundamental. They were made by the Board of Trustees without a shareholder vote. IIRC even the earlier transformation of TSM from a fund of funds to directly investing was not fundamental.

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Re: What Happened to Proxy Voting?

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Epsilon Delta wrote:IMHO while they were fundamental in a legal sense, the changes had no material effect on the desirability of the funds. The index changes for TSM etc., which are unquestionably more important, were not fundamental.
OK. My definition of fundamental is a significant change in portfolio composition, not a legal thingy. I trust Vg to get the legal stuff correct. Many (most?) times that Vg changes the index it is for cost reasons. But when the new index is a never before seen thing I have second thoughts, backtesting notwithstanding. (No index publisher is going to promote a new index that back tests poorly because it probably wouldn't sell well.) :wink:
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