How striking that it is typically top-flight retailers that become embroiled in AGM fisticuffs.

How striking that it is typically top-flight retailers that become embroiled in AGM fisticuffs.

Last week it was Tesco’s turn and the board of one of the UK’s greatest international business success stories took the heat. Almost half of its shareholders either opposed or abstained from backing the grocer’s remuneration report.

And next week Marks & Spencer’s AGM is likely to bring more shareholder sniping. New chief executive Marc Bolland has only just taken up his post but his compensation has already provoked controversy.

Some of Tesco’s oppositionist shareholders had an axe to grind, notably US investor CtW, which has links to US trade unions demanding recognition at the retailer’s Fresh & Easy chain on the West Coast. And Bolland, welcomed by M&S shareholders, would hardly have joined if he had lost what he had been entitled to at previous employer Morrisons.

But setting aside hobby horse groups and particular situations, there is a serious message in the shareholder unrest that retailers would be foolish to ignore. Research from proxy voting agency Manifest, which has been critical of both M&S and Tesco, showed that since 2008 directors’ pay at the UK’s top 100 listed companies has risen 5% to an average £3.1m. That is despite a fall in earnings per share of 1% over the same time.

As the country gears up for what is likely to be a painful period of austerity, bringing heavy job losses, less disposable income and higher taxes, company directors - particularly of consumer businesses such as retailers - would do well not to reward themselves out of proportion to performance.

The stories about boardroom pay and shareholder revolts have so far been confined in the main to the business pages. As the financial screws are tightened on the public, it’s not difficult to imagine tales of alleged excess moving up the news agenda. Store chiefs should remember Cedric Brown at British Gas and avoid the public pillory over pay.

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