Ian Russell, chairman of Johnston Press, has defended last year's £1.65m pay package for chief executive Ashley Highfield and said the firm's staff have enjoyed a commensurate pay rise.

The former ScottishPower chief told the annual meeting in Edinburgh that Mr Highfield's 7.5per cent salary rise was his first in three years and the group's staff had in the same period received four pay rises.

He said there were two "one-off reasons" for what had been a substantial pay-out to the chief executive. "A significant proportion of that one-off remuneration was as a result of the more than doubling of the share price, and the other was the refinancing which substantially reduced our debt and gave us scope to invest in the business. Ashley and the senior team benefited as a result of that achievement."

Chris Morley, a full-time organiser for the National Union of Journalists, had complained that Mr Highfield's £26,000 salary rise last year had been more than most Johnston employees received in a year, and he also stood to gain £7m from share options in 2017-18 if the share price reached 231p. "Our members look at that and say if the company is successful we need to share in that success too."

Mr Russell said editorial teams across Johnston's titles had received salary increases over the past four years totalling around 7 per cent "which is the same increase Ashley has had".

He said executives would only begin to benefit from the share plan once the shares went beyond 231p. "As a shareholder, our share price is at 150p and if it goes to 230p in two years' time I will be delighted."

Mr Russell said the group was now investing £1m in editorial systems, and in training, to improve the quality of the group's products.

Laura Davidson, the NUJ's national organiser for newspapers, said the union was concerned that non-staff freelances were not currently paid the equivalent of the Living Wage, and called for Johnston to commit to being a Living Wage employer.

Mr Russell said senior executives would meet the NUJ after the meeting to discuss the issues.

Mr Highfield, who did not disclose any updates on this year's trading, said interest costs prior to last year had been "crippling the firm", and that digital revenues had been growing and accelerating to reach 21per cent of the total.

He said: "For those naysayers who say regional media is in decline, it just isn't true, our audience grew by a quarter last year."