Robert Monks: Obtaining Proxy Vote Information on 401(k) Plans Often Difficult

Robert Monks has just begun a series of articles at CSRwire on his most recent book, Citizens DisUnited: Passive Investors, Drone CEOs, and the Corporate Capture of the American Dream (my review). Part one of the CSRwire is A Simple Solution to Runaway Corporate Power. See also, Robert A.G. Monks, Crusading Against Corporate Excess, NYTimes, July 6th. His main message is simple, “Corporations must have involved owners and ownership is both a right and a responsibility.” I took his advice on my own 401(k) plan and got an eye-opener. 


Of course, just because you can frame the central issue in one sentence, that doesn’t mean the problem is easily solved. As Monks notes, too many CEOs view good corporate governance “as an impediment to their ability to utterly dominate the affairs of the corporation and its function.” Monks goes on to discuss the institutional investors who run our IRAs and 401(k)s, pointing out they often face conflicts of interest.

We have the laws and yet, the laws are not recognized as required. Most trustees are very risk averse but things would change once they got evidence that laws were enforced. But for now, why go out on a limb to comply with a law that isn’t enforced? If you don’t have enforcement, even the people who want to be activist owners can only do good at the risk of jeopardizing their business.

In the meantime, here is what I would urge you to do: think about the institutions you are associated with, what college you went to, what union you are in — and then get in contact with the people that manage investments for that institution.

Or, maybe you have interests in a mutual fund or IRA or 401(k) plan. You’re the beneficiary. Make them understand that they can’t ignore your rights any longer and tell them you want them to be an active and responsible owner on your behalf.

Monks’ advice is good but many who take it will not find it easy to get answers or to press their rights. I tried dealing with the California state agency that administers my 401(k). I wrote to them to try to get information on proxy voting by funds in the system. The initial response from Human Resources, which administers the program, was “there are no proxy votes associated with our investment options.” Yikes! Total denial.

I then wrote back and pointed out some of their legal obligations:

According to 29 CFR Part 2509, Interpretive Bulletin Relating to Exercise of Shareholder Rights.

  • Proxy voting issues must be examined to determine the positions that are in the best interest of plan participants and beneficiaries. Proxies shall be voted on all issues that affect the value of the shares;
  • A system to verify and track receipt and accuracy of proxies must be in place, with reasonable steps taken to secure any missing proxies and to correct discrepancies in shares on proxies when so indicated;
  • Trustees who assign voting authority to fiduciaries must periodically monitor their activities to verify that tracking procedures are utilized and that proxy voting records are kept in order that trustees can review the actions taken in individual proxy voting situations;

Since then, I’ve been able to obtain a data dump of proxy votes cast by several funds. Believe me, the thousands of pages of pdfs didn’t exactly encourage reading and it was nearly impossible to compare voting records. With regard to evidence of periodically monitoring voting records and other such actions, they basically told me they wouldn’t be ginning up any “fake minutes” just to please me.

I was vaguely hoping for something more along the lines of what Jackie Cook offers up at (with just a few examples here):


Fund Family% Support for Management Resolutions
% Support for Shareholder Resolutions
Resns Voted


Another way to offer a slightly more refined analysis is through methods such as those of Andrew Eggers at  For example, here’s his “activism profile” of CalSTRS.

Issue areaHelp
Help Directors D48.997Chart?chs=85x35&cht=ls&chco=0077cc&chls=1,0,0&chm=b,e6f2fa,0,0,0|v,ff000080,0,16
Help Executive compensation EC59.795Chart?chs=85x35&cht=ls&chco=0077cc&chls=1,0,0&chm=b,e6f2fa,0,0,0|v,ff000080,0,22
Help Corporate governance CG85.490Chart?chs=85x35&cht=ls&chco=0077cc&chls=1,0,0&chm=b,e6f2fa,0,0,0|v,ff000080,0,25
Help Corporate impact CI68.590Chart?chs=85x35&cht=ls&chco=0077cc&chls=1,0,0&chm=b,e6f2fa,0,0,0|v,ff000080,0,20


Activism footprint: More activist funds have larger footprints. Each corner depicts the fund’s activism percentile on one issue area. (More detailed explanation)
Eggers makes it easy to compare funds by all their votes and also by issue area. For example, below are the top few activist funds with regard to voting on executive compensation.
Green Century Equity Fund80.6
AFSCME Employees Pension Plan76.9
Trillium Asset Management71.5
Sentinel Sustainable Core Opportunities Fund69.1
Domini Social Equity Fund68.9
John Hancock Large Cap Equity Fund62.3
Florida SBA59.0
Neuberger Berman Genesis Fund58.3
Calvert Social Index Fund57.6

Have you contacted your 401(k) plan administrator?  If so, what kind of response have you gotten? I’d love to compare notes. Does anyone know of a 401(k) plan administrator that provides meaningful comparisons of the proxy votes of funds in their plan?  I’d love to learn more from readers.

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