Schwab Asset Management Proxy Voting Choice
Program Summary
Overview
Schwab Asset Management constantly strives to keep investors’ preferences, priorities and needs at the forefront of everything we do. Specific to investment stewardship, by offering shareholders choice in how they want the funds they invest in to vote on proxy proposals, we are enabling shareholders of the participating funds (Schwab 1000 Index® Fund and Schwab 1000 Index® ETF) the opportunity to have a voice regarding how the companies owned by the funds they invest in are managed.
All publicly held companies hold annual meetings (and may hold special meetings) at which shareholders can vote on company related matters including, but not limited to board related issues such as the election of directors, capital management decisions, ratification of the auditor and other financial matters, changes to company statutes, executive compensation, equity plans/grants, merger and acquisition activity and shareholder proposals.
Shareholders who own stock in a company directly, can vote their shares on all proposals up for a vote in a manner they feel best represents their interests. Shareholders typically have the choice to vote FOR, AGAINST/WITHHOLD or ABSTAIN on each of the proposals presented on the meeting’s ballot. The number of shares they own is counted toward the vote decision they execute.
Increasingly, mutual fund and ETF shareholders are indicating their desire to have a voice when it comes to voting proxies for the funds in which they invest to better reflect their unique preferences and views. Historically, that has been a challenge. Because shareholders invested in mutual funds and ETFs own shares of the funds, and not in the underlying companies owned by the funds, they are not legally provided the opportunity to directly vote proxies at those companies. To overcome this challenge and allow shareholders to have a voice on matters at the companies held by the funds, Schwab Asset Management is providing the Schwab Asset Management Shareholder Proxy Voting Choice Program. This program provides shareholders of the Schwab 1000 Index Fund and Schwab 1000 Index ETF a voice by allowing them to choose from a selection of proxy voting policy options that will direct how the funds vote and is a great example of Schwab’s “through client eyes” approach.
Mechanics of the Schwab Asset Management Shareholder Proxy Voting Choice Program
- The program is available to all shareholders of the participating Funds (Schwab 1000 Index® Fund and Schwab 1000 Index® ETF) based on record date.
- Eligible shareholders who choose to participate select their preferred proxy voting policy from an established menu of proxy voting policies included in the program.
- Shareholders’ proportional holdings ownership is voted in accordance with their selected proxy voting policy across all ballot matters for all the companies held by the fund.
- The proportional share of portfolio holdings of non-participating shareholders is voted based on the CSIM proxy voting policy.
- Shareholders who choose to participate in the program do not vote proxies directly; they choose a proxy voting policy to direct their votes and Schwab Asset Management is still responsible for voting all proxies.