Say-on-Pay 2025 Proxy Voting Review of Large Asset Managers

The Interfaith Center on Corporate Responsibility (ICCR) and many of its members, including United Church Funds, have long championed the alignment of compensation incentives with long-term, sustainable value, well before the Dodd-Frank law mandated Say on Pay votes. The largest asset managers in the world also state the importance of designing executive compensation packages with long-term sustainable growth in mind. But new research commissioned by ICCR reveals that support for executive compensation varies widely between asset managers. These differences carry significant implications for asset owners and asset managers given the concentration of voting power in a small number of U.S. firms and the growing scrutiny of executive compensation design.

Large U.S. Managers Are Highly Deferential to Management on Say on Pay

2025 proxy voting research reveals that Vanguard, State Street, Fidelity and BlackRock are among the most likely to vote in favor of Say-on-Pay proposals, with Vanguard topping the list by voting in support more than any other asset manager in the report — 97.6% of the time. State Street came in second, with Fidelity and BlackRock following close behind.

The voting results of American asset managers studied contrast sharply with two European managers, Legal & General (LGIM) and UBS. LGIM reported $1.53 trillion in assets under management (AUM) and only voted in favor of executive compensation packages 9% of the time. UBS — based in Geneva, Switzerland, and reporting $6.6 trillion of AUM —only supported these packages 29% of the time.

A Note on Methodology

The data – provided by Canbury Insights – is drawn from asset manager NP-X filings for the July 1, 2024 to June 30, 2025, period that are submitted to the SEC annually by the end of August. Data shown is for all United States company holdings that had votes in that period (number of votes will vary based on the manager’s portfolio). The data aggregates voting across an asset manager’s mutual funds and ETFs. Note that Geode Capital is based on Fidelity’s index fund. Where there was split voting, it is counted as the majority share, i.e. 51 votes For and 49 votes Against is counted as For. Percentages may not sum due to rounding.

A Failure to Define Long-Term Performance

Both U.S. and European asset managers state their belief that executive compensation should promote long-term value creation. However, when it comes to defining long-term performance, Vanguard, State Street, Fidelity and BlackRock avoided specificity in describing how they define and measure long-term performance for incentive rewards. Without a yardstick, the definition of long-term performance is left to a case-by-case analysis. In contrast, UBS and LGIM provide more clarity. For example, UBS flags concern when Restricted Stock Units have a total vesting and holding period of less than five years, and LGIM states that long-term awards should be subject to a performance period of at least three years.

On April 25, Vanguard and BlackRock voted in support of Abbott Laboratories’ 2025 Say-on-Pay, while LGIM and UBS voted against it. UBS’s rationale for voting against Abbott’s executive compensation states: “Vesting performance awards or performance period is less than three years.” LGIM’s rationale states: “A vote against has been applied because the company has set only one performance metric to reward management for long-term performance. One metric does not by itself provide sufficient evidence of the overall long-term performance of the company.” In other words, both European asset managers believe Abbott’s executive compensation package is deficient because it focuses too much on the short term. Neither Vanguard nor BlackRock offered any guidance for why they voted in support of Abbott’s Say on Pay.

Concern Over Peer Comparisons

The European managers also offer more caution on the subject of using peer comparisons of similarly sized companies when establishing reasonable expectations for executive compensation. LGIM and UBS both suggest that peer comparisons should not be used as a “definitive benchmark” or as a “mechanism for matching pay.” LGIM goes on to state in a supplemental report of its views on executive compensation, “Increasing compensation purely based on a benchmarking exercise is no longer acceptable to shareholders.” Vanguard, State Street and Fidelity register no such concern. BlackRock’s proxy voting guidelines do express “concern” when the rationale for increases in total compensation is solely based on peer benchmarking, but it is difficult to see how this impacted their voting strategy without further investigation.

Large U.S. Firms Silent on Pay Ratios

Another stark contrast is in the area of pay inequity. UBS’s Proxy Voting Policy & Procedures considers the compensation of the wider workforce when determining appropriate quantum levels for the CEO. LGIM goes even further in its proxy voting guidelines to designate a policy to vote against the Say on Pay resolution of any S&P 500 company whose CEO-to-median employee pay ratio is greater than 300-to-1 and whose total shareholder return relative to the S&P 500 has underperformed when measured over a three-year period. “LGIM’s principles on executive compensation is based on pay for performance, however, we view pay inequality as a potential source of risk to our portfolios.” In 2025, this pay inequity factor was cited by LGIM in its vote against executive compensation at Starbucks, where its CEO earned $95.8M – almost 3,000 times the typical barista salary of $32,000. Meanwhile, Vanguard, State Street, Fidelity and BlackRock were all silent on the issue of the impact of CEO pay on compensation inequities.

Vanguard, BlackRock and State Street Hold Outsized Voting Influence

As has been noted in prior research, the votes of Vanguard, State Street and BlackRock’s are particularly important because these three firms are the top shareholders in over 75 percent of the companies within the S&P 500. Together, BlackRock, Vanguard and State Street hold roughly 15-16% of the S&P 500.

These combined holdings underestimate the voting influence of these large U.S. asset managers because of those investors who fail to vote. According to a recent study, roughly 71% of retail shareholders and 9% of institutional shareholders do not vote their shares. These non-voters give those investors who do vote even more sway in elections.  A Bebchuk and Hirst research paper found that BlackRock and Vanguard votes represent more than 20% of votes cast in 2021— even though their holdings were closer to 12%. When these large U.S. managers are deferential to corporate compensation practices, their votes ring loudly across Wall Street.

Executive Compensation Under the Microscope in 2026 and Beyond

On December 2, U.S. Securities and Exchange Commission (SEC) Chair and Wall Street’s chief regulator, Paul Atkins, announced that executive compensation reporting rules should be overhauled, and he specifically targeted Say-on-Pay disclosure. This renewed attention on executive compensation reporting rules is sure to keep the issue in the public eye for the foreseeable future.

Another factor that is likely to keep this issue in focus is the advent of pass-through, or sometimes called “Investor Choice,” proxy voting. BlackRock, Vanguard, State Street and LGIM all offer some customers proxy voting policies or guidelines to choose from in order to self-direct these votes. While this option is new, participation is still limited, although some early reports suggest this could have a meaningful impact on the way votes are cast in the years ahead. Vanguard reports that younger investors (45 years and under) chose a Glass Lewis ESG policy 42% of the time. While most of these investors likely chose this policy for its positions on environmental and social issues, this policy is also significantly more likely to vote against Say on Pay. Pass through voting allows these investors to express their preferences on Say on Pay.

Investor Groups Seek Action on Excessive Executive Compensation

ICCR recently launched a new Excessive Executive Compensation (EEC) working group to provide members with a forum to discuss developments in Say-on-Pay voting and more thoroughly consider best practices in this ever-evolving space. Participants in this group are seeking to strengthen their own proxy voting guidelines on excessive executive compensation and also consider how to best hold their managers in pooled funds accountable for their Say on Pay votes. Time will tell how all of these new evolutions impact both the disclosures and votes on executive compensation, but one thing is sure: attention to this issue is not going away.