City heavyweight Sir Gerry Grimstone yesterday dismissed the government's reforms on boardroom pay as "incrementalism", saying more must be done to rebuild public trust in the business community.
The government has proposed listing firms subjected to a shareholder revolt over pay on a public register, but the chairman of Standard Life Aberdeen has said the reform will not be effective.
Speaking at a fringe event at the Conservative party conference, he said most people could not understand the "vast sums" handed out to many executives.
"Pay at the top of many companies is both too high and too complex," he said.
"We would like to see the government taking stronger action."
He said most companies listed in Britain are majority-owned by foreign investors, making the government's policy redundant.
"To me it was an indication of a policy that was extraordinarily well-intentioned but took the easy line. It was incrementalism rather than radicalism," he said.
Business minister Margot James suggested the government could take a tougher attitude towards boardroom pay, but insisted that investors had to be the leaders of reform.
"That's not to say that we won't go further if we don't feel that the measures we are taking on that important subject are not hitting the mark," she said.
"It is shareholders and fund managers that are the key drivers on this. They need to step up to the mark as well. It is not all just down to the government."
Roger Barker, head of corporate governance at the Institute of Directors, said: "While the government's proposals on executive pay are less radical than previously envisaged, it must be remembered that shareholders already have significant opportunities to exert a say on pay. They must use these existing powers to greater effect.
“The naming and shaming of companies that are the targets of shareholder revolts will put pressure on boards to respond. It’s unlikely to be transformative on its own, however, as such instances are already well publicised in the media.”