Investors took a tougher stance over executive pay last year, with shareholders more likely to vote against pay reports at company AGMs and less likely to abstain when remuneration was being discussed, according to the latest TUC fund manager survey published today (Monday).

The 11th annual survey – published the day before the TUC's pension trustee conference takes place at Congress House – looks at the voting records of fund managers, pension funds and voting agencies in 2012.

Reflecting last year's so-called shareholder spring, the survey finds that there was a drop in support for remuneration. In 2011, three respondents supported over 80 per cent of remuneration reports. Last year only one did so.

In 2012 survey respondents supported an average of 30 per cent of pay reports, down from 38 per cent in 2011. Pay remains the issue most likely to see investor action with all but one respondent saying this was the case. Board structure and capital structure issues are the next most frequently cited causes of concern.

As in previous years there is a distinct variation in the voting positions taken. Two investors indicated that they backed the board's position in 85 per cent of management resolutions, while three respondents told the TUC they supported less than 20 per cent of proposals from management.

The survey also picks up on the growing influence of overseas shareholders at AGMs. It cites the example of Barclays' remuneration report and the election of the remuneration committee chair, both of which were opposed by a majority of survey respondents – who represent most of the UK's major institutional investors.

Despite this opposition from UK investors, the bank was able to easily win both votes largely due to the support of overseas investors, the TUC believes. With recent Office for National Statistics figures suggesting that more than 50 per cent of shares in UK companies are now held by overseas investors, this outcome is hardly surprising, and suggests this could be the beginning of an increasingly common trend.

Investors often blame regulatory barriers as the main reason why shareholders don't engage more in the corporate governance process – with insider trading and concert party rules the main ones cited. Yet, when asked in the survey, a large majority said that these weren't major factors explaining shareholders' lack of involvement with companies, and time constraints were the more likely cause.

Although all but one of the survey respondents now publish some of their voting data, the TUC is concerned that this is still not enough information to allow a proper investigation of their activities. This is because some investors only disclose votes against and abstentions which is a long way from providing a clear picture of what goes on at company AGMs.

TUC General Secretary Frances O'Grady said: "For corporate Britain to be more accountable, more needs to be known about the way investors vote. Shareholders need to be prepared to challenge proposals from the boardroom more frequently.

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"Last year when company AGMs were feeling the heat of the shareholder spring, it looked as if investors were at last beginning to curb some of worst excesses of corporate Britain.

"In 2012 shareholders voted down six remuneration reports, suggesting that we might be seeing the emergence of a new breed of more assertive shareholders. But sadly 2013 has failed to live up to expectations. Only three reports have been voted down this year – and none of them were FTSE 100 companies.

"Shareholders who fail to make use of their voting and engagement rights fuel the argument for other stakeholders to play a role in corporate governance. If worker representatives were allowed to sit on boards, they could improve decision making provide an effective challenge to management.

"Ten years ago when the TUC first published its shareholder voting survey, only one institutional investor made public its voting record. Public disclosure is thankfully now more commonplace but the level of detail available is still sketchy, with some investors providing much more than others.

"Clients need to know that their fund managers are using their investments in a way that reflects their wishes and that's difficult if it's hard finding out what they are up to.

"That's why earlier this year the TUC and several of its union affiliates launched a share owner group to put union values at the heart of our voting and engagement. For too long fund managers have failed to reflect the views of the ordinary people whose money is being invested. This is something that urgently needs to change."

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