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I get that shareholders have powers to vote etc. but... are those vote usually used? I have both ETFs and individual stocks, and in neither cases I use my shar

I get that shareholders have powers to vote etc. but... are those vote usually used? I have both ETFs and individual stocks, and in neither cases I use my shareholder power to vote or anything.

anonu 7y ago
In a fund, the manager can vote in a way in which you might not agree with... Even if you had preferred to do a "no vote"
- jypepin 7y ago
  that's not specific to passive funds tho, it's all funds.
username444 7y ago
And generally, unless you understand the business deeply and are actively aware of the trade-offs of your vote, you shouldn't be voting. We can all yell "pay parity" and "tie CEO compensation to worker compensation", but there are trade-offs. It means high performers who earn their pay are more likely to go elsewhere, where they'll be properly compensated. And who takes their place? Most likely, someone less qualified who is on the other side of the bell curve. I'm not saying CEOs are justified in their pay or the rank and file don't deserve better pay, but there's no free lunch. Business is complicated and the current policies were put in place with CAREFUL considerations of the trade-offs. If you don't understand them at a deep level, don't get involved.
- 317070 7y ago
  Here's the thing. Whose trade-offs are we talking about? Why should I not get involved if I understand those trade-offs? Everyone can always claim that there are trade-offs I don't understand about the great injustices of the world (hunger despite plenty food, magnitudes of inequality for equal amounts of work), why should I believe that? Sure, I'll get someone from the other side of the bell curve. But I also saved a lot of shareholder value while doing that, and I am skeptical I will not win out.
  - username444 7y ago
    If you understand the trade-offs and want to get involved, by all means. I'd be careful about thinking you understand trade-offs though. I'm sure you're not an idiot, but I'm more sure that you can't possibly understand the inner workings of a mega corp with 10,000 employees whose full time job involves running the company. If you did, you could create a 1 man startup and put them out of business. Re: world hunger - this is a localization problem. Anyone claiming corn from Kansas should feed starving Ethiopians needs to spend time in the food industry. I can't speak to shareholder value - I'm not a big believer that should ever be the motivation. If you're a passive investor, be passive. I put my passive money into funds because I need to keep up with the market, end of story. I put my active money into small companies I can manage and run.
- batty_alex 7y ago
  > We can all yell "pay parity" and "tie CEO compensation to worker compensation", but there are trade-offs. It means high performers who earn their pay are more likely to go elsewhere, where they'll be properly compensated. Other than more than they're currently making, what does "properly compensated" mean? Should we not use our votes to help decide that? > Most likely, someone less qualified who is on the other side of the bell curve. Damn. Sucks for the board who chose a winner the first time and couldn't find another winner. > Business is complicated and the current policies were put in place with CAREFUL considerations of the trade-offs. If you don't understand them at a deep level, don't get involved. You're suggesting we all throw our hands up in the air and "let it be?" This is such a strange argument.
  - username444 7y ago
    Re: proper compensation - this is a good question, and I don't have the answer to it. Headhunters might. Re: the rest - these are straw man arguments. I never made those claims. My only point was that the OP shouldn't feel bad about not voting. If he's uneducated and unqualified to understand on a business' operations, which we all are because we have LIVES outside of stalking a corporation, he should leave the well paid people to make those decisions. Just because you CAN do something doesn't mean you SHOULD. 99% of shareholders and employees within a company see a very very tiny sliver of what's really going on. If you dont like a company for a particular reason, simply dont put your money into it.
awinder 7y ago
The success rate on proxy votes is fairly low but not at a rate where it effectively never happens. The actual voting mechanism might offer more of a poor behavior deterrent than anything else (like: votes happen and they do succeed, so management should act in the best interests of the firm otherwise you might become one of the stories of rare proxy victories)

I get that shareholders have powers to vote etc. but... are those vote usually used? I have both ETFs and individual stocks, and in neither cases I use my shareholder power to vote or anything.

anonu 7y ago

In a fund, the manager can vote in a way in which you might not agree with... Even if you had preferred to do a "no vote"

jypepin 7y ago
that's not specific to passive funds tho, it's all funds.

username444 7y ago

And generally, unless you understand the business deeply and are actively aware of the trade-offs of your vote, you shouldn't be voting. We can all yell "pay parity" and "tie CEO compensation to worker compensation", but there are trade-offs. It means high performers who earn their pay are more likely to go elsewhere, where they'll be properly compensated. And who takes their place? Most likely, someone less qualified who is on the other side of the bell curve. I'm not saying CEOs are justified in their pay or the rank and file don't deserve better pay, but there's no free lunch. Business is complicated and the current policies were put in place with CAREFUL considerations of the trade-offs. If you don't understand them at a deep level, don't get involved.

317070 7y ago
Here's the thing. Whose trade-offs are we talking about? Why should I not get involved if I understand those trade-offs? Everyone can always claim that there are trade-offs I don't understand about the great injustices of the world (hunger despite plenty food, magnitudes of inequality for equal amounts of work), why should I believe that? Sure, I'll get someone from the other side of the bell curve. But I also saved a lot of shareholder value while doing that, and I am skeptical I will not win out.
- username444 7y ago
  If you understand the trade-offs and want to get involved, by all means. I'd be careful about thinking you understand trade-offs though. I'm sure you're not an idiot, but I'm more sure that you can't possibly understand the inner workings of a mega corp with 10,000 employees whose full time job involves running the company. If you did, you could create a 1 man startup and put them out of business. Re: world hunger - this is a localization problem. Anyone claiming corn from Kansas should feed starving Ethiopians needs to spend time in the food industry. I can't speak to shareholder value - I'm not a big believer that should ever be the motivation. If you're a passive investor, be passive. I put my passive money into funds because I need to keep up with the market, end of story. I put my active money into small companies I can manage and run.
batty_alex 7y ago
> We can all yell "pay parity" and "tie CEO compensation to worker compensation", but there are trade-offs. It means high performers who earn their pay are more likely to go elsewhere, where they'll be properly compensated. Other than more than they're currently making, what does "properly compensated" mean? Should we not use our votes to help decide that? > Most likely, someone less qualified who is on the other side of the bell curve. Damn. Sucks for the board who chose a winner the first time and couldn't find another winner. > Business is complicated and the current policies were put in place with CAREFUL considerations of the trade-offs. If you don't understand them at a deep level, don't get involved. You're suggesting we all throw our hands up in the air and "let it be?" This is such a strange argument.
- username444 7y ago
  Re: proper compensation - this is a good question, and I don't have the answer to it. Headhunters might. Re: the rest - these are straw man arguments. I never made those claims. My only point was that the OP shouldn't feel bad about not voting. If he's uneducated and unqualified to understand on a business' operations, which we all are because we have LIVES outside of stalking a corporation, he should leave the well paid people to make those decisions. Just because you CAN do something doesn't mean you SHOULD. 99% of shareholders and employees within a company see a very very tiny sliver of what's really going on. If you dont like a company for a particular reason, simply dont put your money into it.

awinder 7y ago

The success rate on proxy votes is fairly low but not at a rate where it effectively never happens. The actual voting mechanism might offer more of a poor behavior deterrent than anything else (like: votes happen and they do succeed, so management should act in the best interests of the firm otherwise you might become one of the stories of rare proxy victories)