Monday 31 October 2016 9:50 am

Investors want to better understand why executives are paid what they are paid

An influential investment management trade body has written to the bosses of Britain's largest companies to urge "greater simplicity and flexibility of pay structures".

The Investment Association (IA), which represents companies that manage over £5.7 trillion of assets, wrote to the chief executives of the FTSE 350 to set out what shareholders want from company boards on the thorny topic of executive pay.

"The level of remuneration awarded to executive directors continues to be an area of particular concern for members, as well as society as a whole," wrote Andrew Ninian, the IA's director of corporate governance and engagement.

Earlier this year there were a number of high profile shareholder revolts against executive pay. Boards at the likes of Aviva, Reckett Benckiser and BP had to deal with significant shareholder disdain at remuneration packages.

Proposals to rein in bosses salaries were central to Prime Minister Theresa May's successful bid to lead the country.

The tumultuous summer that followed the Brexit vote has led IA members to now be more focussed than ever on executive pay: "The current economic and political climate [is] also contributing to the level of scrutiny."

"Salary increases or increases to variable remuneration should be justified with clear and explicit rationale. Companies must be sensitive to the prevailing mood regarding executive remuneration.

"Our members’ beneficiaries continue to seek explanations as to why we support the remuneration packages of investee companies," wrote Ninian.