Debate over executive pay intensified this week after a FTSE 100 chair turned on proxy advisors, accusing them of “double standards” and “harming” the competitiveness of global companies based in London through their opposition to big executive pay awards.

At the same time, a new survey shows an increase in the number of FTSE 100 companies seeking shareholder approval for remuneration policies that “significantly increase incentive levels” for executives.

Debate over pay in London has been raging since last year, when London Stock Exchange chief executive Julia Hoggett wrote a blog arguing that higher levels of pay should be considered to keep the City competitive.

Writing in the Financial Times, AstraZeneca chair Michel Demaré says that advice from proxy advisors to vote against pay deals at the company represented “inconsistent voting recommendations” because they take a different line on US and Swiss companies.

“These double standards cannot easily be justified, and do serious harm to the competitiveness of global companies based in the UK,” Demaré writes.

He argues AstraZeneca does not compare itself to other UK-based competitors but to big pharma businesses based elsewhere in the world. Global companies, he writes, must be able to “compete internationally in the war for talent”.

“Putting this at risk, in the pursuit of historical principles, will cause harm to Britain. It should not be considered.”

A vote last week on pay for AstraZeneca’s performance share plan saw a shareholder revolt of 34.66% and 35.57% vote against the directors’ remuneration policy, both well above the 20% needed for public registration, but a long way from derailing board intentions.

Pay hikes ahead

Elsewhere, research from Deloitte reveals many FTSE 100 companies are pushing ahead with new approaches to executive pay that will include big hikes to incentives.

Mitul Shah, a pay expert at the firm, says “radical” pay levels and structures are being unveiled by 16 companies in the top hundred.

“Many of these companies have a significant US footprint and cite the disparity in pay levels between the UK and US—as well as stringent remuneration governance standards in the UK—as a challenge when competing for and retaining senior talent in a global marketplace,” he says.

Shah adds that the coming AGM season will be a “test of proxy and investor appetite” for significant changes to executive pay policies.

Deloitte says the median FTSE 100 CEO pay package rose by 4% from £4.32m in 2022 to £4.5m in 2023.

Julia Hoggett may have triggered a debate about pay last year but it was immediately labelled “tone deaf” by the High Pay Centre think tank.

This year, others—including academics and City grandee Paul Drechsler—have made their opposition known to higher pay levels.

With the AGM season yet to run its course, there will be more controversy surrounding pay. The debate is just getting started.