John Brennan
CEO, chairman
Vanguard Group
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A bear market hasn't changed Vanguard's traditional approach to investing. Vanguard's 27-year reputation rests on two ideas: low-cost mutual funds and indexed investing. And despite the two-and-a-half year slump in broad indices such as the S&P 500, the company continues to champion the same long-term thinking that transformed it into the nation's second-largest mutual fund operator, managing more than $550 billion.
Brennan couldn't have picked a more interesting time to take charge. After 14 years at Vanguard, he ascended to the chief executive spot in 1996 as the hand-picked successor of company founder and industry legend John Bogle, who praised Brennan for his "integrity of character." In 1998, Brennan became chairman, just in time to catch the dot-com and technology bubble, and the subsequent market plunge.
In some ways, Brennan has built on Bogle's basic ideas. Under Brennan, Vanguard became one of the first mutual fund companies to include after-tax returns in annual reports. And in 2000, the company started offering Admiral shares that cut the company's already-low management fees for larger, long-time clients. And like Bogle, Brennan has lately been pushing for better corporate governance from its investments. In August, Brennan for the first time sent executives of top companies a letter that detailed Vanguard's opinion on governance, including an opposition to stock option plans that dilue the investors' holdings.
Yet Vanguard has also moved into areas that Bogle probably wouldn't have tried. The company now offers Vipers -- exchange traded-funds specifically designed for people who jump in and out of funds quickly. Brennan has argued that Vipers actually support Vanguard's philosophy, because they remove rapid traders from traditional funds, while keeping their assets within Vanguard.
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