By Sinead Cruise
LONDON Nov 20 Asset managers running trillions
of pounds of pension fund cash are falling short with efforts to
stamp out excessive boardroom pay.
Only months after the so-called shareholder spring promised
a revolution in the way executives are paid, research by
industry group FairPensions suggests many of Britain's largest
investment houses are still sidestepping client requests to
disclose and explain votes on controversial pay plans.
"People in the UK who are saving for a pension often have
almost no way of accessing information on how their fund has
voted on executive pay deals," said Catherine Howarth, chief
executive of FairPensions.
"As our report shows, even when they take the trouble to ask
their fund, the responses received are often inadequate and
The FairPensions Your Say on Pay initiative encouraged
pension investors and ISA savers to ask their providers to
reject remuneration plans they considered to be unjustified
against a backdrop of recession and lacklustre returns.
FairPensions was notified that only 26 responses were made
by the 246 providers that received at least one email from
clients, undermining the idea that this year's rebellions marked
a watershed in transparent shareholder engagement.
Of those 26 responses, only 11 offered guidance and
explanation of the fund manager's voting decision.
Only 11 providers disclosed their voting records and a
paltry five offered direct links to web pages where savers could
find more detail on these disclosures, the research showed.
The report raises questions about just how willingly fund
managers have accepted enhanced stewardship responsibilities
since the shareholder spring, which resulted in several CEOs,
including Aviva's Andrew Moss and Trinity Mirror's Sly
Bailey, being ousted after battles over pay.
Analysing the public voting of 20 of the UK's largest asset
managers on this year's highest-profile confrontations,
FairPensions found inconsistencies both within and between asset
managers on unacceptable pay packages from one firm to the next.
While it agrees that plans should be considered case by
case, FairPensions said that investors deserved clearer guidance
on what did and did not constitute a satisfactory plan.
Illustrating the grounds for confusion, FairPensions
challenged the logic of this year's approval of a maximum bonus
award of 923 percent of base salary for BP CEO Bob Dudley
when a proposal based on 500 percent for WPP CEO Martin
Sorrell was rejected by almost 60 percent of the vote.
Only one of the 20 asset managers assessed in the report
disclosed reasons for all significant votes, with a further
eight giving reasons only for votes against management.
"If we are serious about tackling spiralling executive pay,
we must empower savers to hold their pension and ISA funds to
account," Howarth said.