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Thursday June 10, 05:36
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Officials Chide Industry Position on Pay Disclosure
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Industry officials say fund company executives’ claims that they don’t care about the actual compensation figures of public company ceos is disingenuous. The issue has come up as the industry is debating the merits of regulatory proposals that would require portfolio managers to disclose their compensation to the public. In their arguments against disclosure of portfolio manager compensation, fund executives say they care only about the structure of pay, not the actual dollar figure.And now they say they don’t care about what ceos of public companies make, only the benchmarks used to set compensation. "But that is being disingenuous," said one fund official, who added that it’s the rare portfolio manager or analyst who doesn’t look at ceo comp.
Arguments for disclosing what portfolio managers make and their investments in the funds that they oversee are often compared to public companies being required to document their chieftains’ salaries. Matt Fink, retiring head of the Investment Company Institute, said a disclosure requirement would drive managers to the pension business, hedge funds or separate accounts, which don’t have the same rule. John Brennan, chairman and ceo of The Vanguard Group, when asked during a panel discussion at last week’s annual ICI meeting if he cared about ceo pay, said, "No, you can take it out." Brennan said he is interested in the structure of pay, whether a manager is paid on short or long-term performance, risk adjusted returns, and other issues. Robert Dow, managing partner at Lord, Abbett, said, "I want to know how, not what." Dow said only independent directors should know actual compensation.
(Fund Action)
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