Sixty of the London Stock Exchange's top 100 companies are failing to follow best practice advice over the control and monitoring of directors' pay, says the Co-operative Insurance Society (CIS).

The insurer examined its £26bn investment portfolio and found 60% of FTSE companies had remuneration committees that contained directors who were not independent by the standards set by the Association of British Insurers (ABI).

Chris Hirst, CIS chief investment manager, said executive pay and bonuses were the single biggest cause of CIS refusing to support company resolutions – which it did on 13 occasions in 2000.

He added: “Uncontrolled, excessive pay can seriously damage a company's reputation as well as diverting wealth from investors.”