L&G steps up effort to curb top pay levels Legal & General Investment Management, one of the UK's biggest shareholders, has stepped up efforts to crack down on excessive pay by voting against 18 remuneration committee chairmen on company boards so far this year. It is the first time the asset management arm of L&G, the UK insurer, has voted against the people responsible for setting pay levels for chief executives, in a sign of growing shareholder activism. LGIM, which owns about 4 per cent of the UK stock market, voted against remuneration committee chairmen at companies where there were high-profile protests against pay, such as WPP, Barclays and Trinity Mirror. A senior UK fund manager said: "This shows there has been a sea-change in the way shareholders are approaching remuneration. They are increasingly active in persuading companies to make sure pay is aligned with performance. Other big shareholders such as Fidelity Worldwide Investment are also taking a much more active approach over executive pay. The US-based asset manager, the fourth-biggest in the world, this summer wrote to 450 companies in the UK and Europe, calling for a radical overhaul of pay policies, including requiring directors to hold shares for the duration of their careers. John Kay, in his review of the UK equity markets in July, also recommended companies pay long-term performance incentives in company shares to be held at least until after the executive has retired. Other big investors say companies are becoming more sensitive to pay issues, with some remuneration committee chairmen having already started negotiations over bonuses ahead of annual meetings next spring. "We have seen a number of remuneration committee chairmen, chairmen of boards and even some CEOs in the past few weeks," said one head of corporate governance at a European fund manager. This was not happening last year. So far this year, LGIM has voted against 111 remuneration resolutions, which include against remuneration reports and chairmen. This is likely to be lower than last year, when the group voted against 125 remuneration-related resolutions. A senior analyst said: "The lower figure is probably because companies are now engaging much more. It is possible we will see a decline in the number of votes against as companies engage more with their shareholders. Other remuneration committee chairmen that LGIM voted against included Pendragon, ICAP, F&C Asset Management, Millenium & Copthorne, New World Resources, Hansteen, Clarkson, Hardy Oil & Gas, Laura Ashley, JD Sports and Stobart.