British Shareholders Concerned Over Executive Pay

Shareholders consider the level of executive compensation in the U.K. to be a top corporate-governance concern, but rarely cause a stir over pay packages in continental Europe, according to voting-advisory agency Manifest as reported by the Wall Street Journal.

In Europe as a whole, shareholder dissent has risen from 2005, the last time Manifest did a comparable survey. The average dissenting votes -- comprising "no" votes and abstentions -- across nine principal country indexes rose to 4.5% this year from 4% in 2005.

The report covers the results of company annual general meetings at groups making up eight European indexes and four in the U.K. during the period between Jan. 1 and Aug. 3. Manifest said an average of 78% of the companies disclosed their voting results.

Manifest found the election of directors was the most-common cause of investors voting against management at company meetings both in the U.K. and in Europe. Shareholders voted against director appointments for reasons including doubts over their independence and the makeup of board committees that decide on pay and audit issues.

In the U.K., opposition to director appointments accounted for 31% of all votes resulting in dissent of more than a tenth of shareholders, while executive remuneration was the second most frequently held issue, with 29% of votes.

However, the issue of executive pay in Europe didn't feature as a significant concern. Executive remuneration accounted for just 3% of the most highly contested votes, while 28% of such votes were over directors and a further 28% over changes to a company's share capital.

Manifest found U.K. share-ownership remains heavily dominated by U.K. institutional investors, unlike most of Europe, where foreign ownership is steadily increasing.