[Gshaheen]

One other differentiation that Vanguard has is that it is owned by the fund holders

“Vanguard set out in 1975 under a radical ownership structure. Our company is owned by its funds, which in turn are owned by Vanguard’s fund shareholders. We focus on meeting the investment needs of our clients.”

So in short, vanguard is customer-owned, where fidelity is owned by mostly the founding family (the Johnson’s).

https://corporate.vanguard.com/content/corporatesite/us/en/c...

[londons_explore]

But does that structure confer any realistic chance of voting control by any real humans who aren't already employed by vanguard?

Funds aren't known for being voting activists.

[ElevenLathe]

Even so, I think the incentives are still for the Vanguard management to make as little profit as possible so that they can compete and have more funds under management. Controlling more billions of dollars of stock shares is kind of its own reward and brings many opportunities for enrichment, and if they don't have to worry about making money for shareholders, they can pretty much always engineer the lowest fees.

[giantg2]

Yes, in theory the fund-owned structure should mean they can charge lower fees than profit driven competitors. However, if competitors are doing things like zero fee funds as loss leaders, or have a banking side to diffuse costs, then it gets less clear.

[anonymousDan]

This kind of thing makes me nervous. What kind of opportunities? Can they somehow loan out shares for example?

[recursivecaveat]

Even if you don't touch a dime of it, "had $X million in funds under management" is good for your next job. In business better to be the CEO of an ailing billion dollar business and drive it into the ground than actually do a good job managing a firm 1/10th the size.

[Gshaheen]

Starting end of Nov 2024, Vanguard is actually beginning to roll out proxy voting capabilities to fund holders (in the US). This looks to be the beginning of deeper proxy voting capabilities, but not much information out there yet.

https://corporate.vanguard.com/content/corporatesite/us/en/c...

[feoren]

Would you rather be a dairy cow on a farm owned collectively by the dairy cows, or owned by one billionaire family? Is it that hard to see how that's immediately a huge positive even if you can't identify individual instances of the billionaire abusing their position?

[bluGill]

Having seen companies go bust and then the employees discovered their pension was invested in now worthless company stock I oppose all schemes to get people to invest in their own company without having significant control over the direction. (I didn't directly see this - it was before I was born but I meet a relative who worked there for 20 years) Pension laws now do not allow pensions to invest in company stock like that. Everyone I know who has worked for an employee owned company talks about how much $$$ they have in the company now - none have any other retirement plan and I can't help but think how bad they would be hurt if things went wrong.

If you are not Cxx level at a company or at least in a high role with a reasonable shot of getting to a Cxx position in the near future don't put your money in the company you work for. Diversity is important in investing and the company you work for is the least diverse of all investment options since you could lose both your savings and your paycheck at the same time.

[ghaff]

Agreed. If you feel that your company is a good forward-looking investment for whatever reason (appreciation/dividends), it doesn't hurt to keep some holdings--from RSUs or otherwise. Though with transaction costs what they are somewhat per this article/discussion, the right question should probably be "If I had the money in cash, would I buy these shares." Employee stock purchase makes things a bit more complicated depending on the exact terms. Post dot-bomb I got a lot more conservative in terms of holding company stock from RSU/ESPP after a decade with a couple of private firms which doubtless cost me some money but I think I took a reasonable approach overall.

[jazzyjackson]

Bad analogy. There are many dimensions in which my experience as a dairy cow may be affected by ownership.

In the case of an investment fund, there's really just customer service and rate of return. If I have a good experience in those dimensions, why should I be concerned with ownership structure?

[fallingknife]

This is academic. I have equal control over both, which is to say none whatsoever. Capacity to influence a company falls to the following (in order)

1. Executives

2. Large shareholders (usually institutional and rarely individuals)

3. Customers

4. Employee unions (if present)

The tech industry is an anomaly where 1 and 2 largely overlap, but this is not true in most industries. Unless you are super rich, you will never be able to have more influence over a large company than you do in the role of a pissed off customer ready to take his money elsewhere.

[richid]

This alone is why I will always choose Vanguard if possible.