Financial reporters are treating the newly enacted SEC regs requiring fund firms to disclose their proxy votes as a shiny new toy. This morning, for example, the Los Angeles Times discovered that fund firms do not always vote to support management. The revelation hit the paper after it took a look at proxy votes released by funds under new SEC regs. According to the paper the records open "a window on what has been a shadowy yet pivotal aspect of the corporate election process."

The L.A. Times is surprised that "major funds including Fidelity Investments and Vanguard Group don't always live up to their reputations as partners of management, the newly released records of their proxy votes show." It adds that "these big funds and others sometimes oppose company-nominated candidates for the board and resist pay plans cooked up in the executive suite, the documents show."

Of course, the proxy records should come as no surprise to those in the industry who have been casting the votes all of these years.

The Los Angeles-based paper also highlighted how Fidelity funds voted in the leadership fight at Walt Disney Co. (a Fortune 500 based in Burbank, the paper's home market). It found out that Fidelity's funds withheld their support for reelecting Michael Eisner as chairman. Nearly half (45 percent) of votes were cast against Eisner. Meanwhile, it noted that Vanguard funds backed Eisner and T. Rowe Price showed a split personality with its Equity Index 500 behind Eisner and the Capital Appreciation Fund and Dividend Growth Fund against him.

The paper also grabs onto the hook provided by a scorecard released by the AFL-CIO on Friday. The union lobbied the SEC in favor of the disclosure bills.

What we're seeing is a textured picture of accountability," Bill Patterson, director of the AFL-CIO office of investments, told the paper. "We're seeing many mutual funds showing a great deal of care and nuance in their proxy votes, and we're seeing others that are very far from where they ought to be."

To read the full L.A. Times story follow this link. 

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