Rosanna Landis Weaver, an executive compensation expert at the nonprofit As You Sow, said it's unusual to see a CEO's bonus -- which typically follows formulas tied to profit goals or other financial performance measures -- docked for offensive personal behavior. But, she said, "I think boards are feeling more emboldened to address compensation directly and that’s a good thing. We keep talking about pay for performance, but pay can be a stick as well as a carrot."

Rosanna Landis Weaver, corporate pay expert at As You Sow, a pressure group that campaigns for responsible investment, is visibly frustrated by the situation. “Vanguard is growing and growing. Its size in the market gives it a huge responsibility. I think passive investment and low fees definitely have a place, but passive investment should not mean that voting [by asset managers] is passive as well.” As You Sow compiles an annual list of what it considers to be the 100 most overpaid chief executive in the US, based on metrics including total shareholder return versus increases in bonus payments and share awards.

According to As You Sow’s latest report, released in February, Vanguard voted against nine of the 100 most overpaid chief executives last year, which the campaign group described as a “shockingly low number” and “way below almost every other fund manager’s [record]”.

There is an additional business incentive for Vanguard to take a tougher stance. Ms Landis Weaver says she used to invest in one of the company’s funds, but recently sold out due to Vanguard’s voting record.

I strongly suspect other clients — both large institutions and individuals — would also like to see firmer action by the fund house to tackle the widening gap in earnings between company executives and average workers. And what is there to lose? Such action would only improve the company’s public image even further.

“They got less cash, but they could end up making more money than they did the prior year,” Rosanna Weaver, a program manager following executive compensation for corporate responsibility group As You Sow, told The Post.

As You Sow flagged as "overpaid" a number of chief executive officers known for high compensation despite the mixed performance of their companies' shares over the period.

The Oakland, California nonprofit found the average returns for the 100 S&P 500 companies it had previously identified as having the most questionable pay went on to underperform the index by 2.9 percentage points over a roughly two-year period ended on Jan. 31.

Study lead author Rosanna Landis Weaver said investors could have used the findings of a similar report from 2015 to short the shares of companies giving their CEOs outsized rewards.

"If you have a CEO whose primary interest is increasing his own wealth, that's not going to be good for shareholders," she said in an interview.

As You Sow made a financial prediction of what each CEO might have been paid based on shareholder returns. Companies with the most red flags and biggest gaps between their actual and predicted compensation were judged the most overpaid.

A report published in February by As You Sow, a US non-profit group, reinforced the view that investors do not want to take a tough stance on executive pay.

As You Sow highlighted BlackRock, the world’s largest asset manager, and Vanguard, the second largest, as two of the fund companies most likely to approve “excessive compensation for CEOs” routinely.

“The 100 most overpaid CEOs deserve more scrutiny than they are getting today from mutual funds and pension funds,” says Rosanna Landis Weaver, corporate pay expert at As You Sow.

A 2016 report from As You Sow, an organization that promotes environmental and social corporate responsibility through shareholder advocacy, identified BlackRock’s CEO, Laurence D. Fink, as the 51st most overpaid CEO in the S&P. Fink’s pay was raised 8 percent last year (to $25.8 million a year), nearly three times the 2.7 percent profit posted by the company — and at a time when BlackRock shares fell nearly 5 percent in value during the year.

That, As You Sow’s executive compensation analyst Rosanna Landis Weaver told Capital & Main, means that “BlackRock is a complete outlier in terms of votes. … Of the largest money managers, funds that have a lot of assets, Fidelity voted against [CEO pay packages] 21 percent; American Funds voted against 32 percent; Schwaab voted against 35 percent; and BlackRock voted against 3 percent from the ones that we looked at.”

“It’s outrageous. This is a man who has helped drive not only a company but maybe the world over a cliff,” said Rosanna Landis Weaver, an executive compensation specialist with As You Sow, a group that promotes social and environmental corporate responsibility and who believes Exxon should move into renewable energy. She said his compensation cut was “a largely symbolic reduction on a package that was exorbitant.”

Mutual funds—professionally managed pools of money from general investors like adults saving for retirement—hold 25% of U.S. equities, according to As You Sow. Public pension funds, another large corporate shareholder, were more likely to vote against pay packages. California pension giant CalPERS, for example, increased its dissenting votes from 30% last year to 47% in 2015, the report said.

“The 100 most overpaid CEOs deserve more scrutiny than they are getting today from mutual funds and pension funds,” As Your Sow’s lead report author Rosanna Landis Weaver said in a statement. “As You Sow believes that now is the time for shareholders, particularly those with fiduciary responsibilities, to become more engaged in their analysis of executive pay and those who award these packages.”