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By the way, as an "owner" I didn't have any say in what the board decided. Or who's on the board. Oh well. Surely there's more going on here than we've been told. Clifford Chance is a mega-international law firm so we can assume he's bright. Seems like he's an index guy. Vanguard runs its funds and ETFs just fine, it's every other aspect of the business that sucks. Continuing shareholder, but transferred the last of my accounts out today. Beating the $100 fee while availing myself of actual personal service.
Big news! He is an outsider. At iShares/BlackRock, he handled many ETF launches, including the recent spot-Bitcoin ETF IBIT - the biggest among the new such ETFs.
As Yogi alluded to, this is the first outsider to hold the Vanguard CEO position. I'm somewhat surprised that Greg Davis, President and Chief Investment Officer, will not assume the CEO position. Mr. Ramji was most recently BlackRock's Global Head of iShares and Index Investments where he was responsible for two-thirds of the firm's assets. Prior to this, Mr. Ramji was Head of BlackRock's U.S. Wealth Advisory business. In this role he implemented new portfolio technologies to reach thousands of advisors and increased cohesion between the iShares / active teams around the mission of building better portfolios. Will he ameliorate the many customer service issues which have plagued Vanguard for years?
FWIW, I have never received notifications for voting for VG BOD
VFIAX owns AAPL, but if you own VFIAX you don't own AAPL directly. So you don't get to vote for AAPL's BOD. Your fund does.
Likewise, Vanguard funds own The Vanguard Group, so you don't get to vote for The Vanguard Group's BOD.
What you do get to vote on, every decade or so, are your Vanguard funds' BODs. The last time this happened was in 2017. If you owned a Vanguard fund then, you got a notice. Though most shareholders probably didn't "notice".
The Vanguard Funds
Notice of Joint Special Meeting of Shareholders
All Vanguard funds will host a Joint Special Meeting of Shareholders on Wednesday, November 15, 2017, at 8:00 a.m., local Arizona time, at the DoubleTree Paradise Valley Scottsdale, 5401 N. Scottsdale Rd., Scottsdale, Arizona 85250. This joint special meeting of the Vanguard funds is being held so that shareholders can vote on Vanguard’s proposals to:
Never mind the fact that "Each nominee [for fund trustee] also serves as a director of The Vanguard Group, Inc." OTOH, since the trustees of The Vanguard Group are identical to the trustees of each fund, you are effectively voting on The Vanguard Group's BOD.
I have had VG funds longer than 2017. I don't remember the voting solicitation then, but there must have been.
But it explains why these votes are rare for VG - its BOD don't have definite terms, and voting is required only when there will be 1/3 or more nonelected BODs (1/3 x 12 = 4). Otherwise, they can just decide by themselves.
And they don't tell you much about how much they get paid. Most "directors" are listed as directors for dozens of funds
You may be confusing executive management (full time job) pay with the compensation given to The Vanguard Group's board of directors and/or the compensation given to each Vanguard Fund's board of trustees.
But that doesn't seem to be what you have in mind. You describe what some people get as "Not bad for what, a few hours work a month or so!". Those are not full time senior officers, those are directors or trustees.
AFAIK, The Vanguard Group's directors receive no compensation for their work on that board. (I'm interested if anyone has concrete information on this.) Rather, they receive compensation for working on trustee boards of individual Vanguard funds. Each board pays a rather modest amount, but when you add up 200 funds, that does come to a pretty penny.
This compensation is public record, easily accessible.
Jeff DeMAso of Independent Vanguard Advisor says that Deana Mulligan got $1.5 million as a director in the six years she was on the Board
Actually, it was about 20% more than that. It's all in SEC filings:
Total compensation from all Vanguard funds (not The Vanguard Group) for Deana Mulligan was: 2023: $330 K 2022: $330 K 2021: $330 K 2020: $287.5K 2019: $287.5K 2018: $287.5K Total:$1852.5K
Perhaps Jeff DeMaso disregarded the 2023 compensation because Ms. Mulligan chose to defer that compensation. I would still consider her compensated for that year.
FWIW, I used Wellington's SAIs. This data is available in all Vanguard funds' SAIs.
"Ramji will have to prove himself at Vanguard, but I'm optimistic about the appointment. Of course, time will tell how much impact (good, bad or otherwise) Ramji can have on the firm; Vanguard isn't exactly a nimble little ship that can turn on a dime."
"Resolving Vanguard's technology and service issues would be an excellent first step. Doing so would at least earn Ramji some goodwill among us shareholders."
it certainly feels like Vanguard's culture has been changing already. Vanguard adding fees and selling off non-core businesses—like its small-biz retirement accounts—lends a sense that the bottom line has taken priority from the shareholder (owner) experience
Though the antecedent (Vanguard returning to its core business) was apparent, I had drawn the opposite conclusion.
Some companies manage to expand their lines of business successfully. Many do not and decide to focus on strengthening their core competencies. For Vanguard, that has always been inexpensive, conservatively managed funds.
Between 2002 and 2019 Vanguard offered a cash management account, Vanguard Advantage. It was offered only to Voyager Select ($500K+) and Flagship ($1M+) customers; the former had to pay $30/year and $4.95/mo if you used BillPay.
This was not Vanguard's core business, and it wasn't going to put money into it unless it saw it getting traction with it well-heeled customers. Today it offers a barebones cash management account that offers nothing but ACH transfers (and a bank sweep) - minimal services that are cheap to provide. Even here, it started with a controlled rollout.
In that press release, Vanguard even comments that it will be "Focusing on core offerings". This is nothing new; it didn't start in 2024 with Vanguard shedding its small business retirement accounts.
Bogle built a solid money management firm. Once he left, Vanguard dabbled in expanding financial products. For the most part, it hasn't done this well. While still dabbling it has often retreated to its core business. Sticking to one's knitting does not mean that one is placing the bottom line ahead of shareholder interests.
This is not to say that Vanguard shouldn't be spending more to support its huge number of investors. It can, and IMHO should, nudge people toward electronic trading and communication. But it also needs to improve its human communications as well. This is not a matter of shedding lines of business. This is a matter of providing decent service for its core businesses.
@msf said, Bogle built a solid money management firm. Once he left, Vanguard dabbled in expanding financial products. For the most part, it hasn't done this well. While still dabbling it has often retreated to its core business. Sticking to one's knitting does not mean that one is placing the bottom line ahead of shareholder interests.
This is not to say that Vanguard shouldn't be spending more to support its huge number of investors. It can, and IMHO should, nudge people toward electronic trading and communication. But it also needs to improve its human communications as well. This is not a matter of shedding lines of business. This is a matter of providing decent service for its core businesses.
How true. When I started invest with Vanguard 30 years ago, their phone service is very good. Then the internet came and online investing began and that human touch decline. Flagship clients have a special phone number but few perks. We are reconsidering our earlier decision to stay put.
@bee, I don’t think a new outside CEO will ‘right’ the ship at this point. @msf summarizes the message appropriately and Vanguard wants to exit many of the less profitable business. Ironically, Vanguard was our initial 401(k) administrator and they were very good. Web support has always been barebones and clunky but we managed.
Having to upgrade their human customer services take lots of $ that Vanguard don’t want to do. We learn to use this web service well even though we have been Flagship clients for many years. Right now, we have moved all retirement accounts out from them. Next is our joint account.
This is a good article by Dave Nadig. His first point regarding embracing transparency really hits home. I invest in several Vanguard mutual funds (and one ETF) and am considered a Vanguard "owner." How can an investor be a true owner when Vanguard doesn't disclose executive's compensation packages, profits, or cash reserves?
If Vanguard could develop an effective form of "pooled longevity insurance" (point #3), it could be very beneficial for the firm and the country as a whole. I need to educate myself about retirement tontines...
Mr. Nadig fails to mention Vanguard's long-standing technology and customer service woes. Ameliorating issues related to this should be prioritized IMHO.
Comments
https://corporate.vanguard.com/content/corporatesite/us/en/corp/who-we-are/sets-us-apart/our-management-team.html#tabs-2be5cbb156-item-be6b32b2b9-tab
I'm somewhat surprised that Greg Davis, President and Chief Investment Officer,
will not assume the CEO position.
Mr. Ramji was most recently BlackRock's Global Head of iShares and Index Investments
where he was responsible for two-thirds of the firm's assets.
Prior to this, Mr. Ramji was Head of BlackRock's U.S. Wealth Advisory business.
In this role he implemented new portfolio technologies to reach thousands of advisors
and increased cohesion between the iShares / active teams around the mission of building better portfolios.
Will he ameliorate the many customer service issues which have plagued Vanguard for years?
VFIAX owns AAPL, but if you own VFIAX you don't own AAPL directly. So you don't get to vote for AAPL's BOD. Your fund does.
Likewise, Vanguard funds own The Vanguard Group, so you don't get to vote for The Vanguard Group's BOD.
What you do get to vote on, every decade or so, are your Vanguard funds' BODs. The last time this happened was in 2017. If you owned a Vanguard fund then, you got a notice. Though most shareholders probably didn't "notice". https://www.sec.gov/Archives/edgar/data/34066/000093247117004795/def14a.htm
Never mind the fact that "Each nominee [for fund trustee] also serves as a director of The Vanguard Group, Inc." OTOH, since the trustees of The Vanguard Group are identical to the trustees of each fund, you are effectively voting on The Vanguard Group's BOD.
Now doesn't that make you feel empowered
But it explains why these votes are rare for VG - its BOD don't have definite terms, and voting is required only when there will be 1/3 or more nonelected BODs (1/3 x 12 = 4). Otherwise, they can just decide by themselves.
Jeff DeMAso of Independent Vanguard Advisor says that Deana Mulligan got $1.5 million as a director in the six years she was on the Board
Not bad for what, a few hours work a month or so!
You may be confusing executive management (full time job) pay with the compensation given to The Vanguard Group's board of directors and/or the compensation given to each Vanguard Fund's board of trustees.
It's not unusual for companies to keep secret their executive (management) compensation. According to Bloomberg (via Investment News) "Vanguard hasn’t reported figures on pay to senior officers since the 1990s."
https://www.investmentnews.com/industry-news/archive/vanguard-keeps-its-own-management-pay-under-wraps-70402
But that doesn't seem to be what you have in mind. You describe what some people get as "Not bad for what, a few hours work a month or so!". Those are not full time senior officers, those are directors or trustees.
AFAIK, The Vanguard Group's directors receive no compensation for their work on that board. (I'm interested if anyone has concrete information on this.) Rather, they receive compensation for working on trustee boards of individual Vanguard funds. Each board pays a rather modest amount, but when you add up 200 funds, that does come to a pretty penny.
This compensation is public record, easily accessible.
Jeff DeMAso of Independent Vanguard Advisor says that Deana Mulligan got $1.5 million as a director in the six years she was on the Board
Actually, it was about 20% more than that. It's all in SEC filings:
Total compensation from all Vanguard funds (not The Vanguard Group) for Deana Mulligan was:
2023: $330 K
2022: $330 K
2021: $330 K
2020: $287.5K
2019: $287.5K
2018: $287.5K
Total:$1852.5K
Perhaps Jeff DeMaso disregarded the 2023 compensation because Ms. Mulligan chose to defer that compensation. I would still consider her compensated for that year.
FWIW, I used Wellington's SAIs. This data is available in all Vanguard funds' SAIs.
https://www.independentvanguardadviser.com/a-new-leader-comes-to-vanguard/
"Ramji will have to prove himself at Vanguard, but I'm optimistic about the appointment.
Of course, time will tell how much impact (good, bad or otherwise) Ramji can have on the firm;
Vanguard isn't exactly a nimble little ship that can turn on a dime."
"Resolving Vanguard's technology and service issues would be an excellent first step.
Doing so would at least earn Ramji some goodwill among us shareholders."
He writes: Though the antecedent (Vanguard returning to its core business) was apparent, I had drawn the opposite conclusion.
Some companies manage to expand their lines of business successfully. Many do not and decide to focus on strengthening their core competencies. For Vanguard, that has always been inexpensive, conservatively managed funds.
Between 2002 and 2019 Vanguard offered a cash management account, Vanguard Advantage. It was offered only to Voyager Select ($500K+) and Flagship ($1M+) customers; the former had to pay $30/year and $4.95/mo if you used BillPay.
https://www.investmentnews.com/industry-news/news/vanguard-to-end-its-small-cash-management-service-78435
https://www.mymoneyblog.com/vanguardadvantage-all-in-one-checking-account-at-vanguard.html
This was not Vanguard's core business, and it wasn't going to put money into it unless it saw it getting traction with it well-heeled customers. Today it offers a barebones cash management account that offers nothing but ACH transfers (and a bank sweep) - minimal services that are cheap to provide. Even here, it started with a controlled rollout.
It launched three managed payout funds in 2008 (talk about bad timing), merged them into a single fund in 2014, eliminated the managed payout feature in 2020 (renaming the fund Managed Allocation Fund), and ultimately merged the fund away altogether in 2023.
https://corporate.vanguard.com/content/corporatesite/us/en/corp/who-we-are/pressroom/Press-Release-Vanguard-Announces-Changes-To-Managed-Payout-Fund-02282020.html
It offered a variable annuity (through an outside insurer) with underlying Vanguard funds. Again not a core product, it got out of the business of administering the VA in 2019.
https://corporate.vanguard.com/content/corporatesite/us/en/corp/who-we-are/pressroom/Press-Release-Vanguard-Transitions-Variable-Annuity-Offering-061919.html
In that press release, Vanguard even comments that it will be "Focusing on core offerings". This is nothing new; it didn't start in 2024 with Vanguard shedding its small business retirement accounts.
Bogle built a solid money management firm. Once he left, Vanguard dabbled in expanding financial products. For the most part, it hasn't done this well. While still dabbling it has often retreated to its core business. Sticking to one's knitting does not mean that one is placing the bottom line ahead of shareholder interests.
This is not to say that Vanguard shouldn't be spending more to support its huge number of investors. It can, and IMHO should, nudge people toward electronic trading and communication. But it also needs to improve its human communications as well. This is not a matter of shedding lines of business. This is a matter of providing decent service for its core businesses.
https://www.msn.com/en-us/money/other/new-vanguard-ceo-tells-barron-s-he-will-lead-with-the-zeal-of-a-convert/ar-BB1mrHBJ
They had to really work hard to drive us away
an-open-letter-to-vanguard-ceo-salim
Having to upgrade their human customer services take lots of $ that Vanguard don’t want to do. We learn to use this web service well even though we have been Flagship clients for many years. Right now, we have moved all retirement accounts out from them. Next is our joint account.
His first point regarding embracing transparency really hits home.
I invest in several Vanguard mutual funds (and one ETF) and am considered a Vanguard "owner."
How can an investor be a true owner when Vanguard doesn't disclose
executive's compensation packages, profits, or cash reserves?
If Vanguard could develop an effective form of "pooled longevity insurance" (point #3),
it could be very beneficial for the firm and the country as a whole.
I need to educate myself about retirement tontines...
Mr. Nadig fails to mention Vanguard's long-standing technology and customer service woes.
Ameliorating issues related to this should be prioritized IMHO.