Morrisons could face a shareholder backlash over executive pay at its AGM this week after a leading voting adviser recommended opposing its remuneration report.

The supermarket giant is bracing itself for the potential revolt at Thursday’s meeting, despite the fact its fortunes have been revived under the stewardship of chief executive David Potts.

ISS, whose judgements can influence around a quarter of a company’s shareholder base, has expressed concerns that Potts’s long-term share award was increased from 240% of his salary to 300%, despite the fact performance targets have been reduced.

However, it is understood that a number of City investors are unlikely to follow the advice of ISS.

Any vote against Morrisons’ pay report would be advisory, not binding.

Morrisons is in the midst of a transformation plan under former Tesco executive Potts, who has focused on lowering prices, improving quality and boosting availability since taking the reins in March 2015.

Potts has also targeted capital-light methods of boosting revenues, including penning a supply deal with Amazon, reviving the Safeway brand to sell to independent retailers and bringing third-party services such as Timpson concessions and Amazon lockers into stores.

His strategy has borne fruit, with Morrisons registering its first year of profit and like-for-like sales growth since 2011/12 in the 12 months ending January 29.

The Bradford-based grocer enjoyed an 11.6% jump in underlying pre-tax profit to £337m, while like-for-like sales advanced 1.7%.

Potts was paid almost £2.8m last year, up from £2.2m the year before, as his transformation plan built further momentum.

In a letter to shareholders, seen by Sky News, Morrisons chairman Andy Higginson defended the changes to Potts’ share award.

Higginson said Morrisons’ LTIP grant of 240% was “below market median” of 275% and added: “We do not believe that anything about the current performance of management, or the scale of the turnaround, is average and have therefore opted for an award level that reflects the opportunity to create long-term sustainable value for shareholders.”

Higginson insisted that Morrisons has considered the changes carefully but said the turnaround plan under Potts had “exceeded most expectations.”