About one-third of institutional investors have little or no interest in linking directors' pay to the performance of their business.
The finding, revealed in a report by PricewaterhouseCoopers, indicates that the government policy of self-regulation of directors' pay is having little impact.
This comes six months after the Department of Trade and Industry issued a consultation paper on directors' remuneration.
It proposes that quoted companies be subject to more extensive disclosure requirements and calls for clear links between directors' pay and performance.
Moira Conoley, a partner in PricewaterhouseCoopers Global HR Solutions, said, "Institutional investors are unlikely to support any demands from the Government for a push for performance-related remuneration until they have clear evidence it will lead to superior business performance.