By Jonathan Davies

Paying seven-figure salaries to top executives is damaging for a company's reputation, according to the Institute of Directors (IoD).

More than half (52%) of the 1,000 business leaders surveyed by the IoD's said that excessive salaries and bonus packages were creating public anger towards the businesses that pay them. And a similar number said that performance-related pay should be deferred by up to three years.

However, the research was carried out by High Pay Centre think tank, which was formed after a report by the High Pay Commission described large salaries as "corrosive".

In 2013, rules were changed so that businesses listed on the stock exchange had to receive shareholder approval for such matters. Now, listed firms need approval from at least 50% of their shareholders.

In November, the IoD lambasted the proposed £25m pay package of new head of oil and gas giant BG Group, Helge Lund. The IoD described it as "inflammatory" and "excessive".

The director of the High Pay Centre, Deborah Hargreaves, said the survey showed "outside the boardrooms of big corporations, ordinary small and medium-sized business owners are as appalled by the culture of top pay as anybody else".

"When big business leaders rake in seven or eight-figure pay packages every year, including massive bonuses regardless of company performance, we are clearly seeing a corporate governance failure, rather than a fair and functional free market.

"Ordinary workers, customers and wider society, not to mention shareholders, are being ripped off."