The Church of England (CoE) is to tell its fund managers to vote down corporate pay policies which give top corporate bosses more than 100% of their salary in annual bonuses, saying that excessive executive pay is a risk to a harmonious society.

The Church holds £8bn in investments with holdings in Barclays, RBS, Tesco, BP, Shell and Vodafone among other global companies. In a new policy on City pay, it says that 'executive remuneration has become misaligned' and bonuses 'appear to have come to be regarded as an entitlement'.

James Featherby, chair of the CoE's Ethical Investment Advisory Group (EIAG), said: 'We want to see lower annual bonuses and greater emphasis on rewarding executives who manage ethical, social and environmental issues well and so deliver enduring corporate success over periods of five to seven years.'

The CoE said bonuses of more than 100% of salary could only be justified if bosses had delivered 'extraordinary results through exceptional performance to the significant benefit of shareholders'. It wants to see long-term incentive schemes for executives, with rewards linked more closely to staff pay.

It pointed out that the archbishop of Canterbury, Justin Welby, receives only three-and-a-half times the average clergy stipend of £21,900. Welby is a former oil industry executive.>

The CoE is calling on asset managers and pension funds to tackle a 'culture of entitlement and greed' among the highest-paid, saying, 'They are - or should be - the main stewards of executive remuneration. But they tend to remunerate their own executive directors and managers generously.'

The CoE is hoping that publication of its new policy will encourage other large shareholders to follow its lead. It warns that 'vastly unequal' material rewards are not only a 'spiritual trap for the rich' but also affect the poorly paid, who can 'become convinced they are worthless in God's eyes because they feel worthless in the eyes of the world'.