Vanguard resists layoffs, adjusts comp: UPDATE
Vanguard Group, Malvern, is resisting layoffs, boosting base pay, and adjusting bonuses.
UPDATED 3/3: Almost alone among big mutual fund companies, Vanguard Group hasn't announced layoffs despite the big drop in U.S. invesment asset values. Partly that's cause Vanguard has a large proportion of bond, index and money market funds, which have been gaining (or losing less) at stock funds' expense. And partly it's company policy, dating back since founder John Bogle.
What we're hearing from Vanguard employees out in Malvern (with close to 10,000 local workers, Vanguard is the biggest private employer in Chester County) is that the company has also rejiggered the pay system. Base pay for many workers was increased last month, as much as 15%, a move popular among near-retirees. And the "Partnership Plan," which awards yearly payments on a point system based on company performance, will be less important for some workers in the future than the December bonus, based on personal performance. There have also been changes in insurance benefits.
The new formula "could cut payouts" and appears designed "to get the increasing expense of the Partnership Plan under control," Daniel Wiener writes in his "Independent Adviser for Vanguard Investors" newsletter, citing unnamed "insiders".
Will "Vanguard crew" earn more, or less, than before? "It's hard to say what the impact will be on a crew-member-by-crew-member basis," said spokeswoman Amy Chain. "The intent is not to pay people more or less than previously, but to better align the rewards earned by each crew member with their personal performance and the overall performance of the company."