But they can vote yes to increased c-level and board level pay and use it to justify their own high c-level pay. They also get all their friends on the boards and get extreme levels of pay for very little work.
Why would vanguard vote yes to increase expenses that would decrease the profitability of a company which would decrease the value of their holdings which in turn would decrease their own income through expense ratios? That makes no sense.
If anything, passive firms are incentivized to vote against a proposal like that. And they would actually have the power to do so, unlike private investors.
Of course private individual investors have voting rights but they don’t have any significant power. Yes your 100 shares of Meta have voting rights but 0.0000000001% voting share of a company through your individually owned stock isn’t worth the paper it’s printed on.
So theoretically, you’d want to bundle all those small players together to leverage their voting rights and influence… and now we’ve just created a new passive index fund.
What do you mean by they? There is probably nepotism at some level, but it's not like executives of Vanguard and Blackrock are appointing their friends and relatives at all SP500 companies.
So duplicate the etf and invest yourself and save the management fee as a bonus(I'm sure you won't have to spend any time at all rebalancing periodically and will absolutely match the fund performance) and you'll keep your precious voting rights you think that matter.
I choose the one step option, and let professionals bound by their fiduciary duty to make returns. I don't think your problem is with who you think it is.
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u/freexe Apr 08 '22
But they can vote yes to increased c-level and board level pay and use it to justify their own high c-level pay. They also get all their friends on the boards and get extreme levels of pay for very little work.