For the first time in ten years, the bosses of the UK's largest companies enjoyed pay rises less than those of the average British worker, with many CEOs not receiving any bonus at all.
The annual report into the remuneration of the CEOs of Britain's FTSE-listed companies by PricewaterhouseCoopers (PwC) found that average earnings in 2009 increased by 2.5%, while FTSE 100 base pay increased by just one per cent and FTSE 250 earnings were static.
Around one in six executive directors at FTSE 100 companies did not get a bonus last year - double the proportion of 2008 - and where they did, average bonuses fell by 20% to £525,000 ($850,000). PwC pointed out, however, that this statistic is significantly influenced by banks, which in many cases did not pay bonuses in 2009.
In the FTSE 250, meanwhile, there was a 40% increase in the number of executives in who did not receive a bonus.
The figures are in a marked contrast to 2008, when CEOs in the FTSE-100 and 250 firms enjoyed 6 per cent base pay rises, against an average of 3.7 per cent for the UK workforce as a whole.
Nevertheless, this still means that the average total pay (that's base salary plus the target value of bonus, long-term incentive and pension) for a FTSE 100 CEO was £3 million in 2009, with the average base salary was £805,000.
According to PwC's Tom Gosling, this shift away from high pay increases is due in part to a growth in shareholder opposition to remuneration proposals.
"Shareholder activism on pay increased significantly last year," he said, "and with the next AGM season taking place during or in the run up to an election, against a backdrop of continued economic uncertainty, scrutiny on executive pay arrangements will not diminish this year."
Indeed the study found that 20 per cent of FTSE-100 companies had more than one in five of their shareholders withhold support for the remuneration report in 2009, a huge increase on the 3 per cent who did the same in 2008. Significantly, the majority of contentious AGMs arose outside the banking sector, with Marks & Spencer, Shell and Tesco among the companies experiencing shareholder revolts last year.
Gosling added that the big issue for shareholders in 2010 would centre around the pension arrangements for top executives and contractual arrangements such as termination terms.
Companies could also expect to experience greater pressure to make their remuneration policies simpler and more transparent.
"The current interactions between shareholders, remuneration committees and executives regarding plan designs and performance conditions are leaving all parties frustrated," Gosling said.
"We need to break the mould of traditional thinking in this area and move to a new model if we want executive pay to work more effectively. This means using simpler plans, with a greater role for remuneration committee discretion in making a rounded assessment of performance."