Companies urged to take vote on pay for directors

The Government's proposal to legislate for improved disclosure of directors' remuneration has galvanised a group of leading investment institutions to strengthen accountability over boardroom pay packages.

Eight leading pension funds and investment managers, controlling more than 5% of the UK stock market, are to write to the chairmen of more than 750 quoted companies on the issue. They will ask them to put their director's remuneration report to an annual shareholder vote.

Last year, just 10 of the top 350 companies put their remuneration report - and therefore their pay policy - to a vote of shareholders.

The list of investment institutions includes Hermes, a fund manager that run the British Telecommunications pension fund, the UK's largest, Gartmore Investment Management, run by Paul Myners, the British Coal pension schemes and fund manager Baillie Gifford.