| BOSTON, March 27
BOSTON, March 27 An architect of the shareholder
votes companies hold on executive compensation said he is
"disappointed" they have not led to more changes, noting that
wealthy mutual fund company leaders make weak overseers of CEO
"The decision-makers at the heads of these institutions also
get paid a lot of money. They're not inclined to cut anyone
else's salary," said Barney Frank, the retired Massachusetts
congressman, in a recent telephone interview.
Frank cited leaders of top asset managers including
BlackRock Inc, Vanguard Group and Fidelity Investments,
which are often among the largest shareholders of S&P 500
companies. "They're like the people whose pay they're voting
on," he said.
Frank's comments came at the start of the spring proxy
season when most large U.S. companies give shareholders a
non-binding advisory vote on pay, as required under the 2010
Dodd-Frank Wall Street Reform and Consumer Protection Act which
A Vanguard spokesman declined to comment. A Fidelity
spokesman said it gives feedback to hundreds of companies a year
on governance and pay practices and casts its votes "in the best
interests of fund shareholders."
A spokesman for BlackRock said its team that oversees voting
"makes decisions based on its view of how best to protect and
enhance the long-term value of our clients' assets" and
independent of BlackRock's management.
Closely held Vanguard and Fidelity do not disclose pay for
their top executives. BlackRock paid Chief Executive Laurence
Fink $22.9 million in 2013, according to the top U.S. asset
manager's most recent pay disclosure.
Frank, a Democrat, was interviewed on a book tour to promote
his recent memoir about his life and career in Congress, which
he left after not seeking re-election in 2012.
Since then CEO compensation has gone up with the help of
rising markets and as shareholders support most companies on
pay. In recent years the three fund firms have
supported executive pay at S&P 500 companies around 95 percent
of the time, according to research firm Fund Votes.
Frank called CEO pay too high overall and said it depletes
how much companies have left to pay other employees.
However, Frank said the votes have proven useful for
investors to express displeasure with management. He said he
would favor higher taxes on big CEO compensation packages, but
that it should fall to shareholders, not regulators, to set pay
"Empowering the shareholders is good," he said.
(Reporting by Ross Kerber; Editing by Richard Chang)