Revealed: fund manager that led shareholder spring

L&G has even been willing to vote against other insurers, including Resolution, Aviva, and Chesnara, and other fund managers, such as F&C.

By James Moore Associate Business editor

Legal & General has emerged as the leader of the "shareholder spring" which saw an unprecedented number of companies held to account for poor practice on issues such as bosses' pay, an investigation by i has revealed.

Between April and June, L&G Investment Management, which holds about 4 per cent of the UK stock market, opposed management resolutions at 76 different companies, more than half the already high total of 125 "no" votes for the whole of 2011.

By June, the fund manager's corporate governance unit was voting against management resolutions at the rate of one out of every three annual meetings.

Amid calls for City institutions to exercise greater stewardship over the companies in which they invest on behalf of ordinary savers, L&G's activism stands in contrast to more traditionally minded fund managers such as the Prudential-owned M&G or the US fund manager Fidelity.

An analysis of their voting records uncovered 24 votes against management in the case of M&G during the same three-month period. That total includes a number of abstentions in addition to fully fledged "no" votes. Fidelity managed 26.

Our analysis included votes against the re-election of particular directors as well as on more technical matters such as waivers of existing shareholders' "pre-emption" rights which give them first refusal to buy new shares.

Governance experts have been frustrated that the tough approach adopted by fund managers such as L&G – it voted against in 17 of the 25 biggest shareholder rebellions over pay during the three-month period – is not being reflected across the City of London. The research suggests that is indeed the case.

Fidelity defended its record, saying: "The focus should be on outcomes rather than votes. We have recently changed our voting policies towards incentive schemes and have publicly criticised companies when we felt that rewards were out of alignment with shareholders' interests."

An M&G spokesman said: "When we vote at a company's AGM we take a keen interest in how the company has been performing for shareholders."