The industry body collected data from 267 AGMs that took place between January and July this year to find that blue-chip companies had largely “listened and acted” on 2016 investor rebellions.
It found a 35% decrease in the remuneration resolutions that received more than 20% dissent, suggesting FTSE 100 companies submitted more conservative executive pay policies that were better in line with shareholder expectations.
Overall, rebellions against FTSE 100 pay packages dropped to nine in 2017, down from 14 in 2016, the data revealed.
In the FTSE 250, shareholder dissent doubled this year with the number of companies seeing votes with more than 20% dissent increasing to 26, up from 15 in 2016.
Chris Cummings, chief executive of the IA, said the data showed investors were “flexing their muscles and holding big business to account”.
He added: “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.”
This year’s AGM season was an important one for executive remuneration because shareholders were given a binding vote on pay for the next three years. This follows legislation put in place in 2013 which states for a remuneration policy to pass it must be approved by more than 50% of shareholders.
The research also found shareholders turning the screw on individual director accountability.
In the FTSE 350, there was a 525% year-on-year increase in resolutions cast against directors, from four in 2016 to 21 in 2017.
Six FTSE 350 companies pulled resolutions on pay ahead of their AGMs for fear of shareholder rebellion. These were Aveva, Aggreko, Chemring, Imperial Brands, Hunting and Safestore.
Business minister Margot James said: “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.”
