Cigarette giant Gallaher and insurer Royal & Sun Alliance have become the latest firms facing shareholder revolts over executives' pay.

Gallaher, which owns the Benson & Hedges and Silk Cut brands, has come under fire for offering two years' salary to a director if the company is taken over.

RSA, which has offices in Horsham, has been criticised for giving its finance director a guaranteed bonus provided he stays with the company until the end of the year.

The National Association of Pension Funds is advising its members to vote against the election of Nigel Dunlop as operations director of Gallaher because he would qualify for two years' salary if he lost his job as a result of the company being taken over, even though he is only on a one-year contract.

It is also calling on members to abstain from the re-election of executive director Nigel Simon at the group's AGM for the same reason.

The NAPF also called on its members, who include some of the UK's biggest institutional shareholders, to abstain from approving RSA's remuneration report at its AGM.

It is critical of the group's decision to give finance director Julian Hance a £250,000 bonus on top of his £400,000 salary without him having to meet any performance targets.