Fidelity just issued its 2011 Proxy Voting Guidelines. As promised, they are a significant departure from past guidelines in the area of equity plan proposals. Where in years past Fidelity looked to dilution as the guiding principle along with assorted other concerns in determining its vote on equity plan proposals, it has now replaced that with 3-year average burn rates:
- 1.5% for Large Caps—companies in the Russell 1000 Index
- 2.5% for Small Caps—companies not in the Russell 1000 Index
- 3.5% for Micro Caps—companies with a market cap under US$300 million
I have not yet had a time to read all the way through them or get answers to some of my questions, i.e., how does Fidelity define “burn rate.” But given how significant the change is regarding equity plan proposals, I wanted to get this information out ASAP.
Here is a link to the new proxy voting guidelines: