Can Vanguard Keep the Faith While Expanding Even Further?

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Mel Lindauer
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Can Vanguard Keep the Faith While Expanding Even Further?

Post by Mel Lindauer » Wed May 22, 2013 1:37 pm

Here's an interesting M* article about Vanguard. From the introduction to the article:
Morningstar recently issued a new Stewardship Grade for Vanguard. The firm's overall grade--which considers corporate culture, fund board quality, fund manager incentives, fees, and regulatory history--is an A.
Don't think any Boglehead will be surprised to find Vanguard earned an A in M*'s Stewardship Grade. ... ?id=597527
Best Regards - Mel | | Semper Fi

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Random Musings
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Re: Can Vanguard Keep the Faith While Expanding Even Further

Post by Random Musings » Wed May 22, 2013 6:56 pm

Although Vanguard seems to lack stewardship when it comes to voting. They tend to vote yes on about anything which I think sends the wrong message to corporations (do whatever you want) as well as Vanguard investors.

That is my main issue with them.

I figure the odds be fifty-fifty I just might have something to say. FZ

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Archie Sinclair
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Re: Can Vanguard Keep the Faith While Expanding Even Further

Post by Archie Sinclair » Wed May 22, 2013 9:25 pm

Another stewardship issue is transparency. Vanguard refuses to disclose the salary of its CEO, which all public companies have to disclose, because of a technicality. Here's Vanguard's unsatisfying explanation: ... -question/.
Vanguard Blog wrote:About one in four comments focused on the compensation of Vanguard executives.

“How much does CEO McNabb make . . . How about the compensation packages for the Directors . . . How about the top 100 compensated employees.”

Although I know this response won’t satisfy those concerned about compensation, Vanguard’s view is simple: We don’t disclose the compensation earned by any crew member. We believe that compensation matters deserve the same privacy protections that we provide to shareholders and their account information.
As their employers, who pay the money, I don't see why we shouldn't know. I have a hard time believing that the privacy of the President of the United States, a Member of Congress, or the CEO of Microsoft is violated because taxpayers and shareholders know their salaries.

The attitude of TIAA-CREF is very different: ... index.html
TIAA-CREF wrote:Although TIAA is not subject to the regulations governing public company executive compensation disclosure, we do so voluntarily for the benefit of TIAA’s participants.
Last edited by Archie Sinclair on Wed May 22, 2013 9:59 pm, edited 1 time in total.

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Re: Can Vanguard Keep the Faith While Expanding Even Further

Post by Laura » Wed May 22, 2013 9:30 pm

Nice article. Thanks Mel.

The views presented are my own and not necessarily those of the Department of State or the U.S. Government.

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Re: Can Vanguard Keep the Faith While Expanding Even Further

Post by shawcroft » Wed May 22, 2013 9:45 pm

Yes, a very interesting article and certainly worth reading by all Bogleheads.
Provides a good perspective on what Vanguard is doing to ensure managing the $2 Trillion they currently have doesn't prevent it from continuing to innovate..
My introduction to Vanguard was in 1989 when my company changed its 401k administrators- and Vanguard arrived. :sharebeer
Definitely one of the best decisions that company made for its employees.

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Re: Can Vanguard Keep the Faith While Expanding Even Further

Post by mnvalue » Wed May 22, 2013 9:52 pm

This is why I wish mutual fund companies were required to pass along voting power, like brokers do. So, for example, if I own 5 shares of fund AAAAX and it owns .1 share of ABC per share, I'd get half a vote on ABC. (Obviously, fractional votes would be combined by the fund and the total rounded off.)

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