Executive Pay Under Scrutiny as Shareholder Dissent Rises in FTSE 100

Highlights

• Executive pay practices within FTSE 100 firms have faced growing shareholder dissent
• UK-listed companies like LON:LSEG, LON:ULVR, and LON:BATS have encountered substantial opposition over remuneration policies
• Relaxed guidelines and global pay competitiveness are shaping remuneration proposals across the FTSE 350

UK-listed firms in the FTSE 100 index are part of the consumer goods, financial, and industrial sectors, and several constituents are experiencing heightened shareholder pushback on executive compensation. Across the broader FTSE 350, company boards are engaging in remuneration proposals that have sparked notable dissent in recent meetings.

Shareholder Dissent Grows on Remuneration Votes

A rising number of listed firms are encountering strong shareholder resistance when seeking approval for executive pay packages. From the beginning of the year to the end of May, over a dozen firms across the FTSE 350 index recorded significant opposition on remuneration reports, far exceeding figures from the prior year. The feedback reflects growing concerns over executive compensation alignment with shareholder interests.

Prominent constituents within the FTSE 100, including LON:LSEG and LON:ULVR, have seen double-digit opposition percentages during recent annual general meetings. Disapproval was expressed toward the scale and structure of executive pay, including fixed base salaries and variable long-term incentives.

Changes in Remuneration Guidelines Influence Board Decisions

Shifts in corporate governance norms are impacting the pace at which listed entities adapt their pay strategies. Relaxed guidance from governance associations has given boards increased flexibility in revising their pay structures. A growing number of firms are initiating new remuneration policies ahead of traditional three-year review cycles, signalling a shift in approach influenced by evolving shareholder expectations and broader market competitiveness.

UK firms appear to be revisiting existing frameworks, focusing on aligning executive compensation with international benchmarks. The reassessment is also evident in consumer-focused entities within the FTSE Dividend Stocks group, where stable income streams from dividends intersect with elevated executive remuneration levels.

Selected Companies Experience Notable Pushback

LON:LSEG experienced strong shareholder opposition during its annual general meeting, with dissent directed at the remuneration report for its senior leadership. Similarly, LON:ULVR faced resistance tied to the compensation of its newly appointed chief executive, whose package was closely compared with prior leadership remuneration.

In the tobacco segment, LON:BATS saw increasing scrutiny due to a performance-linked policy that significantly broadened the upper compensation limit. The company's inclusion in the FTSE Dividend Yield Scan has drawn further attention, given its consistent dividend payment record juxtaposed with executive pay expansions.

The catering sector also saw similar themes, with LON:CPG bringing forward proposals related to elevated performance-based incentives. As competitive pressures mount, executive contracts are being redesigned to maintain talent alignment with long-term business goals.

Remuneration Policy Revisions Across the Index

Across the FTSE 100, nearly half of the companies that published financial results sought approval for updated executive pay policies. The majority of these revisions were structured to reflect increased flexibility in award design and pay metrics. Boards cited global competitiveness as a justification for enhanced packages, reflecting broader market practices observed in international jurisdictions.

Firms within the FTSE framework continue to navigate governance expectations, while balancing evolving pay structures with stakeholder sentiment. The discourse around remuneration is expected to remain a focal point as the reporting cycle progresses and more entities schedule shareholder meetings for the remainder of the year.