[kasey_junk]

Vanguard and Blackrock buy companies as part of their size in the market. Literally a published equation. By definition if a company is a large part of the public markets they will own a big portion of it.

In Vanguards case, that ownership is a direct pass through to the people buying into those indexes. Do the ultimate ownership is dispersed.

Do you have any point other than “big index funds own the correct percentage of the market they index?”

[sylware]

It is extremely simple: biggest share holders have a significant weight at deciding who are directors on the board (then the management teams), and those are usually their ppl.

This is not rocket science.

[kasey_junk]

Ah I see. In that case, Tesla has 4 board members that come from companies with large ownership percentages by Blackrock/Vanguard.

Robyn Denholm came from Jupiter networks, Vanguard owns ~11%.

James Murdoch came from Fox. Vanguard owns ~7%.

Joe Gebbia was an Airbnb founder, vanguard owns ~6%.

Kathleen Wilson-Thompson is a long time Walgreens exec, Vanguard owns ~7%

So no, that doesn’t seem to be the difference.

[sylware]

It has to be the major share holders, or they cannot push their ppl at the head of the company and steer it strongely the way they want. And it seems that some of those ppl can be members of several boards at the same time.

On the companies I had a look at, vanguard + blackrock is usually ~30% and both are usually the biggest share holders.

For instance, amazon, vanguard + blackrock are not in control because, one, there is the azur fund which has a bigger part, two, JB has a massive part of the shares, JB is explicitely in control here.

What I could read from the net vanguard and blackrock are still small in tesla compared to musk, so until he sells to them most of his shares, he is still the capitain on board. In the end, we cannot tell if musk is one of them.

[kasey_junk]

Can you sight which companies where Vanguard + Blackrock is more than 30% of the ownership? That would require a few things a) they be very big components of the index b) they’d have to be in several very popular indexes. Structurally that would be huge Nasdaq listed firms. That would get them into the us total market indexes, s&p 1000/500 indexes and the Nasdaq/qqq indexes. That’s literally just going to be Amazon, Apple, Msft, Alphabet & Meta. Vanguard/Blackrock own no more than 12% combined in any of those companies and the range is between 9-12% for all of them. A 30% ownership stake would be structurally strange.

There is also a pretty major flaw in your conspiracy theory. Vanguard and Blackrock are competitors…

Do you have a threshold for what counts as a “major shareholder”?

How do Fidelity, T Rowe Price and Northern Trust fit into the picture? Are they part of the cabal or on the outside looking in?

Also, what happens when Vanguard & Blackrock fund holders get to vote their shares? Both have dramatically increased that capability and have major plans for expansion of it next year…

[sylware]

If you don't want to understand (calling that conspiracy) that the biggest shalerholders, and to a certain extend major shareholders, of a company get to decide on CEO/board members/Management teams, then do decide where this company is going, I cannot do much about it.

[kasey_junk]

You implied a much stronger statement to that before being called on it.

“starbucks, a vanguard/blackrock company, with msft CEO has massive debts and stabucks is paying huge interests all year long”

That implies way more than those companies are influencing the boards.

You only backed off when your basic “facts” were called out. Everyone agrees that big shareholders have influence, so besides that what are your claims?

[tptacek]

As you write more about this, you don't manage to make it sound less like a conspiracy theory. But that's helpful; I know how to interpret what you were saying upthread now. Thanks for responding.

[sylware]

The major share holders are the ones deciding on directors and management teams and if you think this is a conspiracy theory, cannot do much more, thx for listening.

[dan-robertson]

Have you looked into how vanguard/blackrock claim to decide these things? My understanding is that they used to just go with what the company management wanted and now contract the work out to some specialised firm that tells them the reasonable vote to make whenever they come up. There are a few of these specialised firms who are shared by the big investment funds.

I don’t think blackrock/vanguard exercise much influence. Do they even meet with management? But each year, Larry Fink writes a letter to companies black rock holds saying they should be sustainable or whatever. But I don’t think there are consequences for the companies for ignoring the letter. Big funds are mostly passive and so just follow their formula. S&P surely have a bigger influence on vanguard’s holdings by what they choose to include in their indexes.

But I do weakly find the ‘index funds reduce competition’ theory plausible. Eg in 2020, Pfizer’s big investors probably most wanted Pfizer to cooperate with competitors to help end covid, causing share prices everywhere to recover, rather than working to get a bigger share of the covid vaccine pie.

[kasey_junk]

Vanguard has a report on their interactions with companies. https://corporate.vanguard.com/content/corporatesite/us/en/c... And particularly https://corporate.vanguard.com/content/dam/corp/advocate/inv...

It’s not a question that Vanguard engaged with boards of the companies they interact with and it’s a pretty commonly cited concern in corporate governance circles. So much so that the big index funds are piloting giving their votes to fund holders.

The conspiracy theory issue here is that the poster is a) expressing something much more nefarious by implying Starbucks debt is part of a plot by vanguard/Blackrock b) setting up Musk as a white knight fighting these nefarious forces and c) citing fabrications as facts to back up the claims, then devolving to much less striking claims (“big shareholders have influence”) when called on it.

This has all the hallmarks of a classic conspiracy theory.

[sylware]

Again, as I said if you don't want to understand that the biggest/major share holders decides significantly on board members/CEO hence management people then where the company is going, and you chose to call that "conspiracy", I cannot do much about it.