A fall in the average FTSE100 CEO pay packet has been welcomed as a “step in the right direction”, although the ratio between them and the pay of their employees remained extremely high at 129 to one.

The average pay package for a FTSE100 CEO was £4.5m in 2016, a 17% fall from £5.4m a year earlier, according to analysis by the Chartered Institute of Personnel and Development (CIPD) and the High Pay Centre.

Stefan Stern, director of the High Pay Centre, said the retrenchment had come in the context of political pressure and “in the spotlight of hostile public opinion”. Last year also saw a number of investors railing against executive pay during AGM season.

“This is welcome, but the response has been limited and very late,” said Stern. “It is also, so far, a one-off. We need to see continued efforts to restrain and reverse excess at the top.”

The median FTSE100 CEO pay was £3.45m in 2016, a fall on recent years. However, while the 25 highest-paid CEOs had seen a 24% reduction, the 32 lowest-paid saw an overall increase. The CIPD and High Pay Centre warned investors to watch out for what they described as “chasing the median”.

The 6% of female FTSE100 CEOs made up just 4% of the total pay.

CIPD chief executive Peter Cheese said the fall in pay was “the beginning” of a rethink in CEO remuneration, but should be addressed as part of a “broader review” of corporate governance.

“Rather than focusing predominantly on share price or short-term profit, we need a much more balanced scorecard for performance that also takes account of other indicators of success such as investment in people, social responsibility and accountability, and long-term value creation,” he said.

GMB general secretary Tim Roache said the figures showed “the scandalous gulf between the rich and the rest”.

“Working people create the wealth in this country—and they are sick and tired of fat cat bosses getting all the cream, especially when everyone else suffers squeezed living standards,” said Roache.

Luke Hildyard, policy lead: stewardship & corporate governance at the Pensions and Lifetime Savings Association, said the reduction was positive, but complacency would be “wrong”.

“Our members will be concerned by the fact that multi-million pound pay packages remain the default arrangements for CEOs, despite an absence of convincing evidence that they are necessary to incentivise or reward good leadership,” said Hildyard.