Three in 10 FTSE 100 companies have pledged to cut executives' pension payments in response to pressure from shareholders, according to the Investment Association (IA).

A total of 30 companies have made significant changes, which includes 17 that have stated any new director will be given a pension contribution in line with the majority of the workforce.

Four companies have reduced pension contributions for incumbent directors immediately, three have appointed new directors with a pension contribution in line with the majority of the workforce, and six have made multiple changes in this AGM season – reducing contributions for both existing and future directors.

Business Secretary Andrea Leadsom, who said there is “now more transparency than ever” around the top 100 UK companies, has welcomed the changes. She said the reforms show that important issues of excessive executive pay and diversity on boards are starting to be taken seriously.

“For the first time the UK’s biggest companies will be required to disclose and explain the ratio of their bosses’ pay, and shareholders are already legally required to vote on chief executive pay policy. These are both concrete measures to tackle excessive pay and increase accountability in the workplace,” she added.

In February the IA set out new guidance stating that investors wanted executive directors to be paid pension contributions in line with the majority of the workforce. The IA’s voting information service, IVIS, highlighted companies that did not meet this requirement over the course of the AGM season.

IA chief executive Chris Cummings said: “Shareholders have been very clear they want pension payments for executives to come down to the same level as the rest of the workforce and for diversity on boards to improve.

“We have seen a clear step-change on both of those fronts during this year’s AGM season, which is welcomed by shareholders. This includes a number of companies and directors that have shown significant leadership by reducing their pension contributions to be aligned with their employees.”

Cummings added that shareholders will continue to focus on bringing executive pensions in line with majority of the workforce over the next 12 months. “Companies that do not take on board shareholder concerns risk facing yet more shareholder rebellions next year,” he stated.

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