Vanguard to double investor 'voting choice' program for 2025

By Ross Kerber

Nov 18 (Reuters) - Top mutual fund manager Vanguard said clients will be able to direct the proxy votes of some $250 billion of its assets next year, doubling the scale of its effort to bring corporate democracy to the masses.

In addition to making shareholders of several new funds eligible for its "Investor Choice" program, Vanguard executives told Reuters on Friday the closely held firm will offer a new voting option with less support for socially focused matters.

With $9.9 trillion in assets under management, Vanguard has come to play an outsized role, along with its rival BlackRock BLK.N, in corporate elections. This in turn has drawn criticism from many sides, especially about the firms' proxy votes related to environmental, social and governance $(ESG.NZ)$ issues.

Vanguard has worked in recent years to give investors more say over the votes, which could dampen some criticism. "We recognize that well-informed, smart people can have different opinions, and we want to deliver options to those investors," said John Galloway, Vanguard's global head of investment stewardship.

Galloway in September said only 2% of eligible investors opted in to a previous version of its voting-choice program for the 2024 proxy season, but he vowed to keep building it up by overcoming technical and logistical challenges.

Vanguard's program does not allow investors to specify votes at specific companies. Rather, they may choose among several "policy options" including one that is more likely to back ESG shareholder resolutions

New for 2025 will be a "wealth-focused" policy option from proxy advisory firm Egan-Jones that "that focuses on maximizing shareholder value without being influenced by political or social agendas," according to Vanguard's description.

Vanguard will also allow retirement plan sponsors that offer certain funds to participate in the program, either by choosing a voting policy for their assets or passing the choice to their own participants.

(Reporting by Ross Kerber in BostonEditing by Matthew Lewis)

((ross.kerber@thomsonreuters.com; (617) 412 0093;))