All Reports & Bulletins
The Fund Director Search Process - October 2012 Print E-mail
Nominating Committee
Written by C. Meyrick Payne and Sara D. Yerkey, partners at Management Practice Inc.   

      In the past two years Management Practice has successfully filled five fund director positions. We have found that the secret to starting a successful fund trustee search is to listen very carefully to the existing board members. A proven process in its simplest form appears in the graphic below.

Mutual Fund CCO Compensation in 2011 Print E-mail
CCO Responsibilities & Compensation
Written by Jay Keeshan and Meyrick Payne, Management Practice Inc. (MPI)   
     MPI recently completed its seventh annual Survey of Mutual Fund Chief Compliance Officer Compensation and Organizational Practices. This bulletin summarizes the findings and is based on the submissions of 61 mutual fund CCOs, representing funds with $2.1 trillion in assets.  
Mutual Fund Trustees’ Role in Voting Proxies - June 2012 Print E-mail
Full Board
Written by C. Meyrick Payne, Management Practice Inc. (MPI)   

Several years ago MPI wrote a Bulletin on this subject with Edward “Ned” Regan, the former Comptroller of New York State and an independent Trustee of the Oppenheimer Funds, where he served as Chair of the Proxy Voting Committee. This Bulletin is an updated version.

     One of a mutual fund board’s primary responsibilities is to ensure that fund shareholders receive value from their investment manager. This role includes assuring that the proxy vote, termed an “asset” of the fund by federal regulators, is cast in a manner that optimizes the long-term value of the fund.

     For many years mutual funds played down their proxy voting rights. In effect they abstained from participation in issues that, in the opinion of the investment adviser, were best left to corporate executives. The logic went: if the portfolio manager does not believe in the proposals of corporate management, then sell the stock. An exception was always fund complexes with social agendas, such as Calvert or Domini. However starting about 10 years ago mutual funds became much more active in exercising their corporate governance rights.

Fund Director Compensation Reflects Industry in 2011 - April 2012 Print E-mail
Board Compensation
Written by By Jay Keeshan and C. Meyrick Payne of Management Practice, Inc.   

     Management Practice Inc. (MPI) has just completed its 19th annual “Survey of Mutual Fund Director/Trustee Compensation and Governance Practices”, with data covering 1,833 directors from 343 fund families. Full reports and specific board compensation comparisons are available from MPI.

     While experiencing ever-growing challenges and responsibilities, fund directors overall appear to have held their pay to modest increases.  Year-over-year (equivalent director) compensation increased an average of 3.2% in 2011 over 2010 levels.   Boards at larger fund families saw slightly higher increases of approximately 3.7%.

Did Market Volatility in 2011 Impact Firm Profitability? - April 2012 Print E-mail
Contract Committee
Written by Sara Yerkey and C. Meyrick Payne of Management Practice Inc. (MPI)   

mfgovern_april_2012_img1.png    2011 was a year of hesitant investors, a shifting asset mix, and continued volatility, but when all combined, the result was no change in the average firm’s profitability between 2010 and 2011. Although the market recovery that began in 2009 and 2010 continued in 2011, there was slower economic growth than anticipated, partnered with intensifying European sovereign debt and market fluctuations. The greatest decline was recognized with market depreciation in the third quarter. However, these fluctuations were insignificant in comparison to the decline in 2008, and the asset levels returned quickly, allowing average assets to increase between 2010 and 2011.  Management Practice has analyzed the asset trends and resulting pre-tax margins of publically-traded firms. To highlight the quarterly fluctuations of the past four years, the average ending assets of the included firms is presented at right.

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