By Maximilian Clarke

Remuneration reports from the UK’s leading banks received wide support from institutional investors despite many of the banks’ performing poorly, suggesting the investors are ‘not doing their job properly’, the Trades Union Congress has said.

The ninth annual fund manager fund voting survey, published to coincide with the TUC Pension Trustee Conference taking place in central London today, analyses the voting records of more than 20 fund managers, pension funds and voting agencies across 69 company resolutions between January and December 2010.

The survey has again found a sharp divide in voting stances, with four respondents supporting more than 70 per cent of resolutions, while five respondents supported less than a third.

Remuneration was the most common topic of engagement and the issue over which respondents were most likely to oppose company management. Half of the survey respondents supported less than half the remuneration reports on which votes were sought, and many supported less than a third.

The remuneration reports of all five major UK-listed banks were included in this year's survey. Surprisingly, bank remuneration reports comprised three of the five reports with the highest level of support in the survey. Barclays' remuneration report was backed by 75 per cent of all respondents - the highest in the survey.
These findings are surprising given the banks' recent stock market performance and dividend returns, says the TUC.
This year's survey showed further progress in the disclosure of voting records, with 13 respondents disclosing a full voting record, compared to just nine last year. However, the quality of information varied, with several fund managers only disclosing votes against and abstentions, and others only providing headline statistics.
This improvement in voting disclosure is good news for pension trustees and pension scheme members as it helps them to see how fund managers are using their shareholder mandate to influence companies, says the TUC.
Several respondents indentified changes made as a result of the introduction of the Stewardship Code a year ago, such as improved engagement record keeping. However, the Code has had very little effect on the voting stances taken by institutional investors and needs to be toughened up, says the TUC.

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