Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Money Management Executive can deliver.
  • Exclusive Online Only Content
  • Free Daily Email News Alerts
  • Asset Management Blogs

Retire Rich

By Lee Barney, MMExecutive

July 23, 2007

AIM Investments Revamps Proxy Voting Guidelines

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.

http://www.mmexecutive.com http://www.sourcemedia.com

Recent Posts

Give Control Back to Fund Managers

Finally, insiders launched candid criticism at the mutual fund industry last week, to help it respond sensibly to the economic meltdown and reposition itself to regain investor trust.Foremost among this advice is giving portfolio managers back the power to pick stocks and run with their investment ideas, instead of being so tightly tethered to an investment class and market capitalization. Further, fund managers should step away from their style boxes and take a look at bigger economic trends.

401(k)s Will Supplant Pensions in Our Lifetimes

How far the 401(k) has come since employers first introduced the savings plan in 1981. And how far it has yet to go. 401(k)s, I predict, will become universal in our lifetimes, supplanting all forms of pension plans. The first time I heard about 401(k)s, when I entered the workforce in 1982, was from a fellow classmate from the University of Pennsylvania, who was familiar with then-esoteric 401(k) section of the IRS code (then being touted merely as a tax benefit), since she worked as an accountant for Coopers & Lybrand.

Index of Posts

Post a Comment

You must be registered and logged in to post a comment. Click here to register.

Reader Comments

Be the first to comment.

Lee Barney

Lee Barney has been the editor of Money Management Executive since 2002 and has been writing about Wall Street since 1993. Previously, at United Media’s Wall Street & Technology magazine and Risk/Waters Information Services, she covered financial IT. For TheStreet.com, she wrote the daily “Meet the Street” column covering a broad spectrum of market-moving events. Lee began her career as a reporter in Tokyo with The Japan Times and was executive editor of Spotlight magazine.

Related Items