CAIRN Energy highlighted its determination to keep stakeholders onside following last year's revolt on boardroom pay issues as it revealed pay increases for its chairman and chief executive.

In the company's annual report for 2012, the chair of the remuneration committee, Jacqueline Sheppard, said: "The remuneration committee recognises that at last year's AGM a significant proportion of shareholders voted against the 2011 directors' remuneration report. I can assure shareholders that the strength of views they expressed was fully appreciated by the remuneration committee. In the future we will continue to engage with and listen closely to all relevant stakeholders as we seek to ensure compliance with best practice."

Edinburgh-based Cairn suffered a humiliating 67% vote against its directors' remuneration report at the general meeting last May, amid the so-called Shareholder Spring of unrest about levels of executive pay at big firms.

The vote signalled great unhappiness among institutions about pay policies, despite Cairn's decision to scrap a controversial one off option award for chairman Sir Bill Gammell in January last year. The planned award had been proposed to recognise Sir Bill's role in the completion of the $5.4 billion sale of the bulk of Cairn's Indian business to Vedanta Resources.

Cairn said the remuneration committee undertook a comprehensive review of pay policy for its senior personnel in 2012. This does not seem to have concluded major changes were necessary.

It said: "In general, the review confirmed that: the quantum of the packages was market competitive (except for the chief executive whose base salary on appointment was positioned below a market competitive level with the expectation that it may be increased over time in line with his experience and performance in the role); and the overall composition (with a higher than typical emphasis on long-term variable pay linked to demanding total shareholder return targets) remained appropriate."

The report shows chief executive Simon Thomson's base salary was increased to £494,000 on January 1, 2012, from £475,000. The salary increased by 6.3% annually from January 2013, to £525,000.

Mr Thomson, who succeeded Sir Bill as chief executive in July 2011, earned a bonus of £426,487 in 2012. His total pay and benefits increased to £938,470 in 2012, from £803,311 in 2011. Mr Thomson was also awarded shares worth £1.5m, three times base salary, under the long term incentive programme in June. The awards will vest subject to conditions.

Cairn said the annual rate of fees payable to Sir Bill for 2012 was originally set at £213,000. "Following a review of fee levels paid to the chairman that was informed by external advice, his fees were subsequently increased to £230,000 per annum with effect from 6 March 2012."

Sir Bill received pay and benefits of £227,000 in 2012. He received £1.8m in 2011, including £1.4m compensation for loss of office.

Deputy chief executive, and head of exploration, Mike Watts, earned pay and benefits totalling £846,401 in 2012, compared with £747,152 in the preceding year.

Finance director Jann Brown earned £790,714, down from £799,246 in 2011.

Mr Watts and Ms Brown were awarded shares worth £1.3m and £1.2m under the LTIP in June, subject to conditions.

After achieving renown for making bumper finds in India, Cairn Energy has been building a new portfolio that balances potentially transformational exploration in areas such as Greenland with lower risk activity in the North Sea.