It’s annual meeting season for corporations and there is a major change occurring in the way shareholders vote this year that comes from the world’s largest money manager and most influential vote holder: BlackRock (NYSE:BLK)
Experts agree the world’s dominant fund companies can control the outcome of shareholder votes. On average, over 15% of outstanding shares in corporations are held by the top four or five asset managers including BlackRock, Vanguard and State Street Global Advisors, according to data from Broadridge Financial Solutions.
For some publicly traded companies, the top three fun companies can hold as much as one-third of investor shares. As a result, most shareholder resolutions pass or fail based on how the big fund companies vote. Look no further than upstart activist Engine No. 1, which would not have pulled off its surprise win at ExxonMobil (NYSE:XOM) last year without the big money managers.
Yet Vanguard Group founder Jack Bogle warned towards the end of his life that one of the greatest risks the fund giants faced was a creeping monopoly-like power over shareholder votes which would attract more scrutiny from politicians and regulators.
BlackRock has said that this year it will make the so-called “pass-through” voting — or what BlackRock calls “voting choice — available to approximately 40% of the $4.8 trillion in index equity assets, to start,
with institutional investors in the U.S. and U.K.
BLK shares fell $12.54, or 1.7%, to $731.35.
Related Stories
