American Century ranked the highest, Vanguard Group was second and Fidelity near the bottom of the AFL-CIO's evaluation of proxy voting disclosure by the 10 largest mutual fund firms.
The AFL-CIO first petitioned the Securities and Exchange Commission in December 2000 for disclosure of proxy votes by mutual funds, a move generally opposed by the mutual fund industry, especially by Vanguard and Fidelity.
The AFL-CIO analysis evaluated how the 10 largest mutual fund families voted on curbing chief executive officers' compensation abuse at a dozen Standard & Poor's 500 companies this year.
"We chose executive compensation as our benchmark because, in the words of billionaire investor Warren Buffett, "The acid test for reform will be CEO compensation," the AFL-CIO said in the report.
American Century Investments, Kansas City, Mo., scored 100% in the survey, the highest, while Putnam Investments, Boston, scored 20%, the lowest. Vanguard Group Inc., Malvern, Pa., scored 75%, while Fidelity Investments, Boston, earned a score of 25%, placing it ninth.
The report noted the AFL-CIO's research indicates that of the 120 proxy voting decisions in this survey, 25 involve a mutual fund firm that has a business relationship with the company in which it owns shares.
"These widespread conflicts of interest not only underline the importance of transparent proxy voting by mutual funds, but also point to the need to enhance the SEC rule to require mutual fund advisers to disclose business relationships with portfolio companies," the report said.