The row over rising executive pay has been reignited by a survey showing the median total remuneration of FTSE 100 bosses increased 10 per cent last year to £3.7m.
The rise was five times the increase in average earnings across the economy, well above inflation, and came at a time when the FTSE 100 index fell 5 per cent.
The figures were revealed in an annual survey by Manifest, the proxy voting agency, and MM&K, a remuneration consultancy.
Some of the City’s biggest investors warned that the increases were “excessive” and against the “mood of the times”.
“People are losing jobs and others are struggling to remain employed,” said one head of equity at a UK fund manager. “In those circumstances, rises of 10 per cent are too much.”
The head of corporate governance at a European fund manager said company boards were “still not understanding that the climate has changed”.
The survey found basic salaries of FTSE 100 chiefs rose 2.5 per cent, but total earnings were boosted by deferred bonuses and long-term incentive awards.
Manifest said Bob Diamond of Barclays was the highest paid, with “total realisable remuneration” of £20.97m, followed by Sir Martin Sorrell of WPP on £11.62m and David Brennan, outgoing boss of AstraZeneca, on £11.32m.
Some shareholders at WPP, the world’s biggest advertising company, expect a vote of more than 50 per cent against Sir Martin’s remuneration at Wednesday’s annual meeting.
If his pay is voted down, he would be the third chief executive at a leading FTSE company to be rebuffed this year. Aviva, the insurance group, and Cairn Energy, the oil group, have lost remuneration votes.
Sir Martin has robustly defended his pay, which WPP says reflects the group’s success and should be benchmarked against his international peers.
Vince Cable, the business secretary, is preparing to water down his plan for binding shareholder votes on executive pay. Mr Cable is set to legislate for binding votes every three years instead of annually. But in the Commons, he praised the “shareholder spring”, with investors in some groups growing “increasingly angry” over excessive pay for poor performance. He said he wanted it to be “more than just a seasonal phenomenon”.