Executive Summary: Vanguard’s trustees oversee trillions of investor dollars—but how much of their own money do they entrust to Vanguard’s funds? This review reveals uneven commitment, from trustees with meaningful stakes to others barely nibbling. Transparency is limited, alignment mixed—and shareholders deserve better.
Mutual fund directors are either not being paid nearly enough for what they should be doing—or far too much for what they actually do.
– Jack Bogle, SmartMoney, July 2012
Vanguard often tells its fund shareholders that they “own” the firm. But ownership is about more than slogans—it’s about alignment. Do Vanguard’s hand-selected trustees actually invest alongside us? Or, in simpler terms, “Are they eating their own cooking?”
It’s a very mixed bag: Some trustees have bellied up to the table with meaningful stakes across multiple Vanguard funds. Others barely show up, raising uncomfortable questions about whether they’re truly aligned with the shareholders they represent or if the meal they’re serving up for others isn’t fit for their own palates.
Finding the answer is unnecessarily difficult. The data on Vanguard’s trustees’ investments is typically only disclosed in bits and pieces over the year, and with a significant time lag. As you should expect from me, I’ve done the heavy lifting to provide you with the most up-to-date information.
The disclosures reveal where trustees show conviction and where they fall short. Why does this matter? Because if Vanguard’s leaders aren’t willing to eat their own cooking, what does that say about the meal being served to the rest of us?
Director or Trustee
Vanguard’s Board of Trustees is technically distinct from its Board of Directors.
The directors oversee Vanguard, the company, while the trustees oversee the funds (on our behalf). There is considerable overlap between the two boards, but it's not perfect. For example, Vanguard’s CIO, Greg Davis, serves as a director but isn’t a trustee.
Frankly, I tend to use the terms “directors” and “trustees” interchangeably, but I’ll be more careful about this in the future.
On the Menu: What Trustees Actually Own
Before putting each trustee in the spotlight, let’s look at the funds they’ve selected from Vanguard’s menu. Is there any consensus?
In total, 55 funds count at least one trustee as a shareholder. That may sound encouraging—until you realize over 140 funds don’t have a single trustee dollar invested in them.
It’s no surprise the trustees tilt toward index funds rather than actively managed ones—this is Vanguard, after all. But here’s the remarkable part: not a single actively managed Vanguard stock fund has even two trustees as shareholders. When it comes to active management, consensus simply doesn’t exist.
This means that many Vanguard shareholders are sitting down at the firm’s “active management” table without a single trustee joining in the meal.
You’ll find a detailed table of trustee fund ownership here. But the highlights tell the story: