LONDON (Reuters) - The Labour Party called on Sunday for fuller disclosure on how fund managers vote on executive pay, as public anger over directors’ high salaries mounts ahead of the annual general meetings of the UK’s top companies.
Labour said that it had proposed an amendment to bring into force powers contained in the 2006 Companies Act.
This would enable the government to require institutional investors and fund managers to publish information on how they exercise voting rights attached to shares in publicly listed companies.
Under the current non-legally binding UK Stewardship Code, institutional investors are required to publicly disclose their voting records and, if they do not, to explain why.
However, Labour cited research from corporate governance advisory firm PIRC which showed that only 15 percent of asset management companies produced full disclosure statements on their voting records at company annual shareholder meetings.
“Making fund managers disclose how they vote on issues will mean the pensioner or the ordinary investor will be in a better position to access information on how votes are cast in their name on matters such as executive pay,” Labour Business Secretary Chuka Umunna said in a statement.
Both Labour and the Conservative/Liberal Democrat coalition government have sought to clamp down on excessively-high corporate salaries, with all three parties targeting the banking sector in particular.
Prime Minister David Cameron in January promised legislation this year to tackle excessive executive pay. Many people in the UK are struggling with wage cuts and unemployment while top company directors still get multi-million pound pay packages.
British bank Barclays (BARC.L) holds its annual shareholder meeting on April 27, followed by rivals HSBC (HSBA.L), Standard Chartered (STAN.L) and part-nationalised lenders Royal Bank of Scotland (RBS.L) and Lloyds (LLOY.L) in May.
Barclays tweaked its bonus scheme last week following resistance from investors to its original proposals, but many investors are still angry that many banks have continued to pay high salaries despite falling share prices and weak results.
Reporting by Sudip Kar-Gupta. Editing by Jane Merriman