Shareholders in Morrisons only narrowly backed the supermarket chain's remuneration report at the AGM vote this week (15th June) with the proxy voting results showing that the company received a 48% vote against. However, the binding vote on its remuneration policy was passed with 92% support.

There was also a 12.5% vote against Rooney Anand, the senior independent director who is a member of the remuneration committee, which is part of a trend this year of shareholders of holding remuneration committees members more directly to account for their pay decisions following guidance from investor groups.

Following the meeting Andrew Higginson, chairman, is reported to have said that the company had consulted widely with shareholders on the new remuneration policy, and noted it had received strong support and said the board was surprised not to get a higher vote in favour of the directors’ remuneration report.

Leading proxy voting advisers had advised a vote against the company's remuneration with concerns raised about the performance targets set for executive directors. Manifest's analysis had awarded Morrison's remuneration a D grade - with the lowest grade being F. Manifest noted that the targets on the long-term incentive scheme had been made less stretching than last year and that historic payouts suggested that targets in the past had not been sufficiently challenging. The analysis also suggested that total remuneration - including salary and bonuses - could be considered excessive and not in line with company performance.

Higginson is reported to have disagreed with this analysis stating: "Not only does the board believe the targets to the be significant and stretching, but the judgement on what the right measures are going to the heart of rebuilding the business for the long term – striking the right balance between investment in the business and continued outperformance."

Sarah Wilson, Manifest chief executive, refuted the argument that shareholders simply followed the recommendations of proxy advisers. She told the Guardian newspaper: 'This instance demonstrates that companies should be listening very hard to what shareholders are saying."