Median shareholding requirements have increased to 250% of salary for CEOs in the FTSE 100, up from 238% last year, although they stayed the same at 200% for FTSE 250.

More than a fifth (21%) in FTSE 100 and nearly three quarters (71%) in FTSE 250 introduced or increased their post-vesting holding periods for LTIPs, which makes for more than half (57%) of businesses across the FTSE 350. Median holding period is two years.

Chris Barnes, partner and head of reward at KPMG in the UK, said: ‘Long-term incentive plans continue to gain traction in the remuneration mix for executive directors as shareholders look for ever greater alignment between pay and long-term performance. The introduction and extension of holding periods and shareholding requirements in the listed community shows that UK plc is moving in the right direction.

‘The trend will be encouraging for the Financial Reporting Council, which recently proposed a five-year lock in period for LTIPs as part of its consultation on a new UK corporate governance code. While the code is not mandatory, UK corporates appear to know which way the tide is turning.’

For the 2017 AGM season, only two companies in the FTSE 350 received majority votes against their annual remuneration report and no companies received a majority vote against their policy. Despite the general support, shareholder dissent increased on both counts compared to 2016.

Significant votes (20% or more) against annual remuneration reports rose slightly from 9% to 10% between 2016 and 2017. The majority of companies last put their remuneration policies to binding votes in 2014 when 5% received significant votes against. In 2017, 6% received significant votes against.

Barnes said: ‘Typically, voting down a package is due to a lack of disclosure for targets, significant increases in base salary or when there isn’t a clear link between pay and performance.’