Executive pay in the UK is "not fit for purpose", damaging and requires reform, according to a major report authored by some of Britain's most high-profile bosses.
Legal & General chief executive Nigel Wilson and Sainsbury's chairman David Tyler formed part of the Executive Remuneration Working Group that compiled the report, published in conjunction with the Investment Association.
It said that despite the fact the FTSE is trading at broadly the same levels as 1998, executive pay over the same period has more than trebled.
"There is an increasing disparity between average wages and executive wages. This misalignment has resulted in widespread scepticism and loss of public confidence. Failure has sometimes been rewarded, and use of median comparators has driven disproportionate rises in executive remuneration.
"This is ultimately damaging to the listed company sector."
The report comes amid AGM season in the City, which has already seen BP humiliated after 59% of shareholders voted against boss Bob Dudley's £13.8m pay deal at the company's annual meeting.
The boards of some of Britain's biggest companies such as HSBC, AstraZeneca, Barclays, WPP and Reckitt Benckiser are all braced for a backlash over executive pay as they prepare to hold their AGMs in the coming weeks.
The working group called for greater transparency and a "clearer alignment" of shareholder, company and executive interests.
It said that long-term incentive plans, under which executives can boost their pay considerably, can produce "perverse consequences".
Instead, it argues that pay rewards should be more aligned with company performance and shareholder value, and that there should be penalties for failure.
The report also took aim at remuneration committees, which set executive pay.
"Remuneration committees need to be more accountable for the decisions they take. They need to ensure that remuneration outcomes are fully aligned with overall business performance and strategy. Discretion should be used, both upwards and downwards, rather than committees relying on formulaic outcomes."