David Prosser: Pay revolts are here to stay and rightly so

Outlook One can understand Sir Stuart Rose's frustration over the latest complaints about the remuneration policies of Marks & Spencer. The retailer's chairman was pretty dismissive yesterday about suggestions he might find it difficult to get shareholders' backing for the company's remuneration report at next week's annual general meeting, particularly in the context of the strong trading update M&S unveiled.

Still, Sir Stuart must be aware of the head of steam that is building up against M&S on pay, in particular the £15m package handed to its new chief executive Marc Bolland. It is not just the usual suspects – activist groups such as Pirc and Manifest – that are concerned but also more conservative investors such as the Association of British Insurers.

These days, the fact that a company is trading successfully does not necessarily preclude a bit of bother with shareholders. Tesco's AGM last week was noticeable for two things: the steady stream of shareholders who wanted to thank Sir Terry Leahy, its outgoing chief executive, for his success at the retailer, and the hefty vote against its remuneration report.

Quite right, too. One positive effect of the financial crisis and the navel-gazing it prompted has been that many more shareholders now understand it is their duty to hold boards of directors to account, even at the most successful companies, and not just in the financial services sector. Where investors would once have looked the other way on matters such as pay, as long as performance was heading in the right direction, now they're prepared to stand up and be accounted. Long may it continue.

The issue at stake here is not whether M&S is performing well (it seems to be) or even whether Marc Bolland is a decent appointment (there is every reason to think he will prove to be) but the extraordinary rewards the new chief executive has been promised. On any reasonable basis, they look excessive and investors have a responsibility to say so.