CAIRN Energy said it will consult shareholders this month in an attempt to draw the line under the controversy generated by plans to pay a bumper one-off bonus to its former chief executive Sir Bill Gammell.

The Edinburgh-based oil and gas company also reiterated that it would not revive its attempt to pay the former Scotland rugby international such a bonus. The plans were shelved in January following revelations in The Herald that they had sparked significant unrest among investors.

In its annual report, Cairn said following consultation with "several institutional shareholders" and their representative bodies the company's board had withdrawn the resolution it had planned to put to shareholders concerning the proposed award and had determined not to pursue it.

"Meetings with shareholders will be held in April 2012 to close out this matter and to discuss the [directors' remuneration] report," the company said.

In January, Sir Bill said Cairn would have discussions with shareholders with a possible view to developing more acceptable proposals. Last month his successor Simon Thomson said the proposals had been dropped.

The decision means Sir Bill will not get a special reward following the sale of the bulk of Cairn's interest in its successful Indian business to Vedanta Resources for $5.5 billion (£3.5bn) last year.

This triggered payouts to investors totalling £2.2bn. Sir Bill got around £5 million in respect of his holding.

Cairn's proposal to award Sir Bill share options worth £2.5m, and to pay £1m to charity, was criticised by corporate governance specialists including Manifest, PIRC and the Association of British Insurers. Due to vest in three years the award did not include performance conditions.

Sir Bill still enjoyed a big increase in his total pay and benefits to £1.8m in 2011, when Cairn spent around $1bn drilling off Greenland without making a commercial find. He earned £980,000 in 2010. The details of the increase may cause unease in some quarters.

Sir Bill received £1.4m compensation for loss of office after swapping the chief executive's job for the chairmanship from July last year.

In February the head of research at Manifest, Alan Brett, said awarding a loss of office payment to a chief executive who is becoming chairman is extremely unusual.

He warned: "It has the potential to be a flashpoint at the 2012 AGM [on 17 May]."

Sir Bill received fees of £106,500 as chairman after earning £312,500 in salary as chief executive in the first six months. The chairman's fees increased by 8% annually from 6 March, to £230,000.

Mr Thomson assumed the chief executive's job on an annual salary of £475,000, compared with the £625,000 payable to Sir Bill.

He enjoyed a 4% pay increase, to £494,000, from 1 January.

Mr Thomson earned total remuneration of £803,000 last year, including a £350,000 bonus compared with £631,000 in 2010.

Mike Watts, head of exploration and deputy chief executive, saw his total remuneration fall to £747,000, from £780,000. He earned bonuses worth £300,000 in 2011 and £350,000 in 2010.

Finance director Jann Brown earned £799,000 compared with £620,000 in 2010.