Leading Canadian pension fund managers are growing impatient with corporate boards that fail to align executive pay with shareholders’ interests, but they aren’t yet up to challenging them directly.

Those are the findings of a survey released Wednesday by the Shareholder Association for Research and Education (SHARE).

The survey, which examines the voting records of 32 investment managers and proxy voting services with combined Canadian equity holdings in excess of $130 billion in 2011, found most participants taking a tough stance on poor pay plans. This year, more than one third of the issues surveyed were votes on executive compensation, it says. And, as a group, participating firms said that on these pay proposals, they voted against company management more often than they voted in favour.

However, it also reports that a shareholder proposal that challenged companies directly on the large and growing gap between executive pay and average salaries — by asking for disclosure of the ratio of executive pay to the earnings of the average employee, and for “justifications” of the gap — did not fare well. It received support from only one in every three surveyed firms that voted on it. “This muted response to the pay disparity proposal indicates that few firms answering the survey have an appetite for calling market norms into question,” said Laura O’Neill, SHARE’s director of law and policy.

The survey examines asset manager voting decisions on approximately two-dozen issues that attracted relatively strong opposition from shareholders generally, in oredr to “develop a profile of managers as either willing to object to poor corporate practice or as complacent supporters of management”.

“The survey sends a positive message to those concerned about the protection of Canadians’ retirement savings”, says Bill Mackenzie of Hermes, “but we still have a long way to go before all institutional investors make full use of their voting power to effect high standards of corporate governance and accountability, including in the area of executive compensation.”

The publication also includes key data on how firms make their voting decisions, it says. “Responses to the survey provide evidence that Canadian pension fund asset managers are devoting more attention to proxy voting and disclosing their decisions,” according to Charley Beresford, executive director of the Columbia Institute, a survey sponsor. “Over the past three years, for example, an increasing percentage of firms report that they have proxy guidelines, that they review them every year and that they make them available to the public.”

The survey is a project of SHARE, the Columbia Institute, and Fonds de solidarité.