Shareholders at Merrill Lynch have voted against two proposals that would have given them more power to vote on executive pay in the latest fight over compensation at investment banks.

The Catholic Equity Fund in Milwaukee, Wisconsin, had proposed that shareholders should approve every future compensation package for non-employee directors. The fund said: "There is evidence that directors who enjoy high director compensation are more likely to pay excessive chief economic compensation and that high director pay coupled with high chief executive pay correlates with underperformance of the company."