Fidelity puts British boardroom paymasters on notice

LONDON, Feb 16 (Reuters) - Fidelity International, one of the biggest investors in British companies, has proposed making powerful remuneration committee heads more accountable to shareholders.

Such a move would ratchet up pressure on company boards to rein in excessive pay after rebellions at a number of firms' shareholder meetings in recent years, including BP and WPP (Frankfurt: A1J2BZ - news) , and comes ahead of the bulk of this year's votes.

Fidelity has recommended the chair of the committee which sets company directors' pay be replaced if more than a quarter of shareholders oppose its plans.

The suggestion forms part of a response to a British government review of governance and executive pay, seen by Reuters on Thursday and earlier reported by Sky News, ahead of a deadline for responses to the consultation on Feb. 17.

Trelawny Williams, who heads up governance at Fidelity, said he supported keeping the annual vote on a company's remuneration report as advisory only, but wanted investors to have a binding vote on a firm's pay policy every year instead of every three.

If less than 75 percent of votes cast backed either the report or policy, the chairman "should step down from that role and be replaced by another director as we believe this will make individuals more accountable", he wrote.

Fidelity holds shares in Britain's FTSE 350 companies worth more than $15 billion, Reuters data showed. (Reporting by Simon Jessop; Editing by Alexander Smith)