Suggestion to Fidelity's trustees: Withdraw Gates appointment, unless ...
Fidelity's independent trustees have appointed Robert M. Gates, the former CIA director, as Fidelity chairman and "top watchdog," according to Ross Kerber of Boston.com. My advice to Fidelity trustees: Withdraw the appointment, vote him out, or do whatever you need to do to get him out of that position. Unless ...
My call for Gates to leave (unless ...) has nothing to do with the SEC rule that requires funds' boards of trustees to be led by outsiders. Fidelity chief executive Edward Johnson III hates it, but I think it's great -- it forces the company to be more accountable to the shareholders of its funds (i.e., us), by deciding on important issues relating to fees and other Fidelity business. I fully support having an independent chairman who looks out for my interests.
But I don't want it to be Robert Gates (unless ...). Why? There are two main reasons:
1) He is the president of Texas A&M University. I have worked in higher education before, and there is no way the president or any other senior officer of a major institution can effectively manage a second major position somewhere else. Gates admits in the Boston.com article that he only comes to Boston on an average of less than one time per month, and does other Fidelity work "on weekends." This position needs more than a part-timer.
2) It seems his pay will approach $500,000 per year. Assuming that the article's claim that he spends "up to 10 days a month" on Fidelity business is accurate, that's at least $4,166 dollars per day. Not only is that far too much for a part-time position, it also tells me that he will be totally unable to relate to the interests of ordinary shareholders, many of whom make less than $4166 per month.
But here's the "unless ..." part of my post:
While I am suspicious of the experience and political connections of a former CIA director, I recognize that having someone from outside the financial world -- particularly someone familiar with conducting critical analysis that takes into account multiple, disparate factors -- is an asset to any organization. Therefore, an ideal solution to this issue is for Mr. Gates to drop his Texas A&M appointment, voluntarily take a pay cut, and devote himself full-time to the Fidelity trustees and shareholders.
Otherwise, Gates should leave.
Bad news if you are a Fidelity 401K account holder: Some Fidelity customer service reps are apparently not so good at protecting customers' account information, and in a few cases have emptied the account holdings to con men. That's not all: It's not entirely clear ... Read
It would appear that Fidelity Magellan -- which was once the biggest mutual fund by holdings back in the 1990s -- is on a rebound under new management, according to Ross Kerber of the Boston Globe ("Magellan rebounding after change of manager"). Read
Fidelity getting into a sector dominated by Starbucks and upscape catering companies? That is apparently the case, according to Jay Fitzgerald of the Boston Herald: Read
Spotted this on the Fidelity homepage last week: "Fidelity Labs," a website that apparently serves as a test bed for new electronic Fidelity Investments products. Users are welcome to give feedback about the tools. Read
