Today's FT leads with the news of Xtrata's pay policy rebuff from shareholders as another example of shareholders flexing their muscules over pay for failure.

Despite a 35% fall in EPS in the past year, the Xstrata board proposed increases in exec pay including a 4.8% rise for CEO Mick Davis who, according to the FT earned $2.3 last year. Well that would be correct if we were only talking about basic salary. However, if  instead of the headline basic figure, you take into account the TOTAL remuneration (and delve deep into the footnotes), that figure becomes a staggering £113.8m of which, £53,489,537 was received in cash as 50% of an amount vesting as a long-term bonus under the Added Value Incentive Plan. Another £53,489,537 was delivered in the form of deferred shares, half to be released after one year and the remainder after two years. What's more is that those remuneration figures exclude a pension contribution of £2,720,563 or 172% of salary.

Here's what Manifest wrote in its AGM analysis earlier this month: "The CEO’s total remuneration package is among the most lucrative ever seen at a UK plc, and levels of reward for 2008 are truly astonishing. This is mitigated somewhat by the fact that long-term incentives have vested at a level which could not have been foreseen at the time of initial grant, following a period of exceptional Company share price performance which has subsequently reversed. Disclosure is comprehensive but lacks clarity."

Let's not mince words, the remuneration is not 'potentially excessive', it was excessive by any measure, as the shareholder votes clearly show and no amount of 'freezing salaries completely'  would have compensated shareholders.

Indeed the excessive nature of the amounts vested under the Added Value Plan is thrown further into the spotlight by the fact that the value of the part delivered in deferred shares had fallen from £53.48m to £6.57m as at the time of publication of Manifest's research.

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