LONDON, Sept 6 Reuters European shareholders are increasingly contesting corporate executive pay reports, data showed on Wednesday, as investors unhappy with companies39; approach to environmental and social issues vote against director remuneration.

The percentage of remuneration reports disputed by investors across seven countries reached 42.9 during the 2023 annual general meeting season, the highest in at least five years, according to an annual review by shareholder engagement firm Georgeson.

Daniele Vitale, Georgeson39;s head of governance UK Europe, said limited environmental and social resolutions meant shareholders were using pay reports to voice dissent. Georgeson defines a vote as contested if at least 10 of votes are against.

There is also a perception that some companies have used ESG metrics in pay to make it easier for executives to meet payouts, Vitale told Reuters.

Investors increasingly want companies to incorporate environmental and social factors, such as greenhouse gas emission cut commitments, into their business strategy.

Switzerland saw the highest proportion of contested resolutions on remuneration reporting, at 68.4.

The UK had the least, at 20.2, but its percentage has been rising and is up from 16.2 in 2021, Georgeson found.

Opposition to executive pay looks likely to increase too, as big asset managers including BlackRock and State Street adopt socalled devolved proxy voting rights to end investors, who may vote differently from…