Mutual funds back firms on pay

Mutual funds continue to support the lion's share management-backed proposals that determine how top executives are paid, according to a new report. According to "Failed Fiduciaries," put out by the American Federation of State, County and Municipal Employees, the nation's 29 largest mutual-fund companies were in support of 75.8% of management-sponsored proposals for the 12 months ended June 2006. That number increased slightly from favorable votes on 75.6% of such proposals in 2005. Meanwhile, the average support for the pay-related shareholder proposals included in the study was 46.5%, according to the study, done in conjunction with The Corporate Library, a Portland, Maine-based researcher specializing in corporate governance. AllianceBernstein Holding LP, Barclays Global Investors NA and AIM Investments supported 94.8%, 94.7% and 91.1% of management proposals, respectively. On the bottom of the list, TIAA-CREF, T. Rowe Price Group Inc. and Columbia Management Group Inc. voted for 72.6%, 77.1% and 70.8% of such proposals, respectively. Five fund families - Fidelity Investments, Putnam Investments, Legg Mason, Morgan Stanley and T. Rowe Price - decreased their management proposal support levels by more than 5% in 2006 from 2005. Merrill Lynch was the only fund family to increase its support by more than 5% during that period. American Federation of State, County and Municipal Employees is based in Washington.