* Nearly half its shareholders vote against directors' pay deal
* Vote comes a week after the company ousted CEO Sly Bailey
* Trading environment expected to remain challenging
* 17-week revenue down 4 pct, ad revenue down 11 pct
* National circulation revenue down in March, April
By Paul Sandle and Adveith Nair
LONDON, May 10 (Reuters) - Shareholders in Britain's Trinity Mirror, publisher of the Daily and Sunday Mirror and the People, rebelled against executive pay awards with nearly half voting against its plans.
The vote comes a week after the company said Sly Bailey was to step down as chief executive, after shareholders took issue with her large pay package in the midst of falling profits and sales.
On Thursday, the publisher, which also owns a host of regional titles, said 45.89 percent of its shareholders voted against its directors' remuneration report in the face of growing anger over executive pay.
A "shareholder spring" is spreading from Britain across Europe as investors become increasingly hostile to big rewards for directors in companies whose shares are flagging.
Bailey received almost 1.8 million pounds ($2.9 million) in cash and share awards last year, while the company's operating profit fell 15 percent to 104 million pounds despite cost cuts that included axing jobs and freezing salaries.
Earlier in the day, the company said it had been hit by the launch of Rupert Murdoch's Sun on Sunday in February, dragging circulation revenue at its national titles lower in March and April, compounding a prolonged slump in advertising.
It added that the trading environment was expected to remain challenging for the remainder of the year with month on month volatility in revenue trends.
The revolt at Trinity Mirror comes days after Aviva chief executive Andrew Moss stepped down in the wake of similar protests. Swiss bank UBS, Credit Suisse and Barclays have also seen revolts over executive pay.
Company directors are expected to remain under pressure even after the market downturn ends with investors and directors saying the days of shareholders routinely rubber-stamping company resolutions at annual meetings are gone.
Trinity Mirror said earlier that revenue for the 17 weeks to April 29 fell 4 percent as ad spending in its titles dropped 11 percent.
It said ndications pointed to revenue in May falling 5 percent as spending on advertising shrunk by 10 percent and circulation revenue dropped 4 percent.
Trinity Mirror, like its rivals, has been battling falling circulations and ad revenue. It has been turning to the internet, but growth has not been fast enough to offset the falling revenue from its newspapers.
Its Sunday titles benefited from the closure of rival Sunday title News of the World last summer, but that gain evaporated when Murdoch launched a Sunday edition of his Sun tabloid at the end of February.
Circulation revenues at its national titles were up 10 percent in January and February, but fell 3 percent in March and April following the launch of the competing title.
But it said at least 15 million pounds of cost savings would support profitability, and it would continue to reduce debt after a 24 million pound payment cut in the period cut the level to 197 million pounds.