More companies have had their remuneration reports disapproved of than in the shareholder spring

Hayley Kirton
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Bob Dudley was among the top bosses to have his paypacket shunned by shareholders (Source: Getty)

You weren't just imagining it – there really was a lot of uproar about bumper boardroom pay in 2016.

More FTSE 100 chief executives received a bloody nose over their paypacket during this year's AGM season than in the so-called shareholder spring, according to figures published today.

The proportion of companies which managed to secure less than three-quarters of votes in support of their remuneration report so far this year has almost doubled compared with 2012, as a lack of bonus target disclosures, unclear links between pay and performance and rising paypackets with no explanation continue to leave a bad taste in investors' mouths.

Deloitte, which carried out the research and will be publishing a full report later this month, also found only a quarter (26 per cent) of the top 30 companies had their remuneration report approved by 95 per cent of shareholders or more, compared with around half (52 per cent) which could make the same claim last year.

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"So far this year we have seen a higher proportion of companies receiving less than 75 per cent of votes in support of their remuneration report," said Stephen Cahill, partner in Deloitte’s remuneration team. "While we're still talking about a relatively small number of companies this is rightly a cause for concern.

"The 2016 AGM season has been bruising for a number of companies, perhaps even more so than the shareholder spring of 2012."

Looking ahead, Cahill told City A.M.: "2017 will be similar to 2016. Most companies will be fine but those that get it wrong can expect a very rough ride."

Stefan Stern, director of the High Pay Centre, told City A.M.: "The so-called 'shareholder spring' of 2016 did have a bit more substance to it than the votes from four years earlier. The BP vote above all was symbolically important. I think sentiment is finally shifting among some big shareholders, in the right way."

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Back in April, BP boss Bob Dudley received a high-profile thumbs down from investors, when 59.29 per cent voted against his $19.6m (£13.8m) pay packet.

Just a fortnight later, Weir Group shareholders shunned the company's proposed remuneration policy, with a mere 27.6 per cent voting in favour.

High pay has also found itself on the agenda this autumn. Newly appointed Prime Minister Theresa May has proposed measures such as binding votes on pay and employee representatives on companies' boards in a bid to curb sizeable salaries and bumper bonuses, while, last week, star fund manager Neil Woodford slammed "frustratingly rife" levels of short-termism in the City.

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Deloitte's study also found total pay among FTSE 100 bosses had remained broadly flat this year, while the number of companies running multiple long-term incentive plans had dropped over the last ten years.

"Remuneration committees are taking some very positive steps in the right direction but the downside is that remuneration structures are becoming more and more standardised," warned Cahill. "It seems unlikely that the same structure can support the diverse nature of our top 100 companies."

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