Industrial conglomerate Siemens (SIEGn.DE) and steelmaker ThyssenKrupp (TKAG.DE) -- both chaired by corporate governance specialist Gerhard Cromme -- have set votes on pay at their annual general meetings (AGM) this month, keeping ahead of a new law that lets investors force a vote.

Cromme and his finance directors from Siemens and Thyssen met institutional investors on Friday to discuss, among other things, the remuneration systems of both groups, a source familiar with the matter told Reuters.

"Certainly the issue on managers' pay was discussed. This is normal because this is the first time the AGM would discuss the proposal based on this new law," the source said.

The 'say on pay' law took effect last August after the German government, which pumped billions of euros of taxpayer money into bailing out the financial sector, responded to public outcry over bonuses for bankers.

Companies do not have to put a vote on the agenda unless shareholders seek it and the vote is not binding, but experts said it would send a strong signal of investor sentiment.

"If it is a 'Yes' vote, it is a kind of platonic expression of trust," said Axel Wenzel, a corporate lawyer at Oppenhoff & Partner.

"If it is a 'No' vote, it has no legal consequences but may very likely have an impact on the public. It becomes a public relations disaster. This was exactly the intention of German legislators who want management to act more responsibly and sensitively on remuneration issues," Wenzel said.

Annual meetings are often a day-long affair in Germany, where every shareholder has the right to put questions.

In the case of Siemens, it is very likely someone will question chief executive Peter Loescher's pay which is more than 2.5 times that of an ordinary board member, said wage specialist Christiane Hoelz of private investor protection group DSW. German executives earned an average 2.27 million euros ($3.3 million) in 2008, down 21 percent from 2007, DSW said, adding Siemens was the top payer. Loescher got 7.1 million euros in total in 2008-09 year, down from 9.8 million a year earlier.

"In Germany ... it is completely unusual to talk about salary details even within the family. Therefore, it was hard for managers to understand why they should publish their salaries in the first place," said Franz-Josef Leven of DAI.

ThyssenKrupp was one of a few DAX heavyweights to publish individual board member pay in 2002 when Germany issued a non-binding corporate governance code. A 2005 law forced holdouts into the open, mostly among middling and small companies.

Shareholder activist group SdK said it would approve ThyssenKrupp's wage system but reserved final judgment until complete details were submitted at the AGM on January 21.

ThyssenKrupp ordinary board members gets a base pay of 585,000 euros which SdK said was a "good" figure. Chief executive Ekkehard Schulz's basic salary is 966,000 euros.

Its variable component was still oriented on the share price, and SdL said this should be changed to another benchmark.

The company said total fiscal 2008-09 board pay was cut to 6.5 million euros from 19.8 million the year before, showing the wage system "breathes together" with its financial results.

Thyssen lost 2.4 billion euros in its 2008-09 year.

Employee shareholders of Siemens were set to oppose the proposal on managers' pay on Jan 26. "The short-term-oriented annual bonus and the share price-based remuneration ... are harmful," said the group, which owns 1 percent of the company.

(Reporting by Marilyn Gerlach; Editing by Dan Lalor)