Earlier this month, Vanguard made a controversial decision to cut some retiree medical benefits, and in the aftermath, chain-of-command questions are arising, writes Erin Arvedlund for The Philadelphia Inquirer.
The move was met with extremely vehement pushback from the Malvern-based investment giant’s current and former employees.
They see the firm’s generous benefits package as compensation for pay scales that appear to lag behind industry standards.
The reaction was so strong that the company quickly reversed its decision and reinstated the affected benefits that same day.
Questions remain, however, about the internal source of the tough call to cut the benefits in the first place. Vanguard now faces implications that its board of directors — 11 well-compensated members — were not even consulted regarding the benefit cuts.
Neither the company, nor its board members chose to comment on internal decision-making processes.
Outside experts, however, said that it is highly likely that the board would be consulted with such a high-profile matter under consideration.
“That decision affects the rank-and-file and morale, and certainly something a board like Vanguard’s would be aware of or ratify,” said University of Delaware business professor Charles Elson.
Read more about Vanguard and the benefit cuts in The Philadelphia Inquirer.