Pension funds can tame the fat cats

Fund managers are increasingly exercising influence on fat cat pay by using their right to re-elect directors to push companies towards a fairer remuneration policy

Pension funds have a substantial ownership in companies that have introduced hugely controversial pay rises for senior executives. Should these funds be able to influence the company's remuneration policy? The answer that first springs to mind is yes, the institutional shareholder should be able to influence the company's remuneration policy. However, it may not be that simple. What are the ramifications of this and is it really taking place? We have often read about fat cat pay rises but only rarely and recently have the actions of institutional shareholders started to reach the press...