Vanguard Profit Sharing on Pace for 15 Percent Hike

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The flood of assets into Vanguard’s popular index funds is rising the tide of the Malvern company’s profit sharing program, which is on pace to increase 15 percent this year, according to a Philadelphia Inquirer report by Erin Arvedlund.

Called Partnership Plan dividends, the internal profit sharing is outperforming hikes of 12 percent in 2016, 13 percent in 2015, and the average 10.2 percent a year since its 1984 creation, based on estimates by Independent Adviser for Vanguard Investors Editor Dan Wiener.

“Indexing may have made some investors wealthy over the three decades the Partnership Plan has been around, but the successful marketing and running of index funds is contributing even more to the bank accounts of Vanguard’s executive team,” Wiener said.

“The company is exceedingly profitable, and hence has the ability to pay its captains millions of dollars every year.”

Read more about how Vanguard’s recent successes have spread its wealth to those who work there in the Philadelphia Inquirer here, and check out previous VISTA Today coverage of the firm here.

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