The level of shareholder rebellion among FTSE 250 firms has doubled since 2016, research from the Investment Association shows.
During the recent AGM season 29 companies received more than 20 per cent of dissenting votes, up from 15 companies in 2016. Furthermore, the number of votes against individual directors jumped 525 per cent from 4 directors last year to 21 directors in 2017.
In the broader FTSE 350 there has been a 400 per cent increase in votes against directors being re-elected while six companies have withdrawn resolutions on executive pay packages due to fears of investors rebelling during the voting process.
However FTSE 100 companies have clamped down on executive pay this year in response to calls from shareholders.
This year many of the blue-chip companies whose shareholders voted against current pay levels in 2016 have brought in more conservative executive remuneration for 2017.
Since 2013 Government rules stipulate that companies must put their pay policies to a vote every three years, which for many FTSE 100 companies falls this year.
This year the number of rebellions against remuneration policies among FTSE 100 firms is down 35 per cent to 9 from 14 in 2016.
Chris Cummings, CEO of the Investment Association, says: “Executive pay among the UK’s largest companies is starting to decline to a level more in line with shareholder expectations. There is still some way to go, but a strong signal has been sent to boardrooms around the country that investors won’t tolerate rewards that are out of line with company performance and have concerns about executives’ spiralling pay.
“Well-run and well-performing companies that yield long-term shareholder returns are critical to ensuring that British savers and pensioners are able to lead more prosperous lives into their later years.”
Business Minister, Margot James MP, adds: “The UK’s largest companies are showing encouraging signs that they are listening to shareholders and wider concerns about executive pay. But with an increase in the number of shareholder rebellions at FTSE 250 firms over bosses’ pay packets – we cannot afford to take our eye off the ball.
“Our responsible business reforms, which will be published shortly, will improve boardroom accountability and enhance our reputation as one of the best places in the world to work, invest and do business.”