Vanguard voted against 64% of the stock-based compensation proposals put forth by companies in which the Vanguard funds have significant ownership, said John J. Brennan, chairman and CEO of the Vanguard Group, in a letter to CEOs of those companies.
The letter, which outlined Vanguard's views on major governance topics, said the firm opposes equity-based compensation programs that are poorly designed or excessively generous, although it supports minimum stock ownership, holding-period requirements on stock ownership and the use of restricted stock grants instead of options. Vanguard also opposes fee agreements in which fees for consulting or other non-audit work exceed audit fees.
In addition, the firm would vote against barriers to shareholder action or other proposals that dilute shareholder effectiveness, such as not making shareholder rights plans subject to a shareholder vote. Vanguard also wants audit, nominating and compensation committees to be composed entirely of independent directors, and it supports a change recommended by the New York Stock Exchange requiring all listed companies to have a majority of independent directors.