Title

Mutual Fund Advisor Fees and Executive Compensation

Document Type

Article

Publication Date

2-2010

ISSN

1741-3591‎

Publisher

Palgrave Macmillan

Language

en-US

Abstract

The case of Jones v. Harris (2008a) that is currently before the Supreme Court poses issues with regard to mutual fund managers' fees and expense (Advisory Fees). However, the case may signal the direction courts will take in reviewing management compensation of large corporations as well. Advisory Fees pose a number of fundamental issues that appear in many fiduciary relationships. First, why do the fees and compensation of fiduciaries raise unique problems? Second, what are the solutions to the fee problem? Third, what is the role of the courts in the determination of Advisory Fees? Fourth, what are the tests that the courts or the boards of the mutual funds should apply in determining Advisory Fees? Fifth, how did the Seventh Circuit decision in Jones v. Harris determine these questions? Sixth, what are the implications of Jones v. Harris? In conclusion, by analyzing these questions we might uncover guidelines to the issues with regard to corporate executive compensation as well.

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