Only a "handful" of Britain's mid-cap companies have failed to receive majority shareholder support on exec pay according to a study of FTSE 250 companies.
A combination of high profile shareholder revolts against executive pay earlier this year and Prime Minister Theresa May including it as a central pillar of her successful leadership bid, has focussed public attention on the topic.
However, a report by accountants Deloitte indicated that when it came to listed mid-cap firms, investors generally voted in favour of remuneration packages during 2016. Deloitte said that 80 per cent of Britain's FTSE 250 groups had received the backing of at least 90 per cent of shareholders.
“Every year, the vast majority of companies receive very high levels of support in favour of the remuneration report and in the last ten years only a handful of FTSE 250 companies have failed to receive majority support. This suggests institutional investors do not hold material concerns around executive pay in listed companies, or are not using their votes to register concerns," said Mitul Shah, a partner in Deloitte’s executive remuneration team.
The report found that the trend towards support for mid-cap board remuneration was because pay was linked to long-term incentives and had only grown at a moderate rate: two per cent on average.
“FTSE 250 companies continue to follow the lead of the larger listed companies and over the last few years have made some significant changes to pay policies, which aim to create a better alignment between executives and the interests of shareholders,” said Shah.
Aberdeen Asset Management called for rule changes that would force boards to consult with shareholders over future executive pay packets.