Retailer Kingfisher, which owns the B&Q and Comet chains, has bowed to shareholder pressure and decided to revise the pay packages for its top directors, a source familiar with the situation told Reuters yesterday.

Kingfisher's move comes amid a growing wave of shareholder discontent over companies setting lucrative pay deals for directors which are not regarded as sufficiently geared to performance.

Last week investors at drugs giant GlaxoSmithKline voted down that company's costly executive pay scheme. Kingfisher holds its annual general meeting on June 4th.

Leading shareholder groups - the Association of British Insurers (ABI) and the National Association of Pension Funds (NAPF) - had raised concerns over a share option scheme for chief executive Mr Gerry Murphy and other pay deals. The company has now decided to revise this scheme, according to reports.

Finance director Ms Helen Weir and executive directors Mr Ian Cheshire and Mr Bill Whiting will have their two-year rolling contracts reduced to 12 months. Shareholder groups say two-year contracts can open the way for massive pay-offs for executives should they fail to perform.

Mr Murphy's share option scheme originally assessed the performance of the company's shares over a three-year period.

However, the NAPF and the ABI objected to what they see as a loophole which allows the assessment to be deferred.

Shareholders believed this made it possible for the firm to choose the most favourable time to measure Mr Murphy's performance.

Instead, the assessment will now be required over Mr Murphy's first three years in the job.