The owner of All Bar One is facing a shareholder revolt over plans to bolster the guaranteed pay awards of its top executives amid a broader firestorm over corporate governance at the company.
Sky News understands that several major institutional investors are planning to oppose Mitchells & Butlers' (M&B) remuneration policy because it plans to replace a performance-based share scheme with more certain annual awards.
Institutional Shareholder Services (ISS), an influential voting advisory firm, said in a report to clients that M&B's explanation of the shift in policy "mainly discusses retention and a goal to maximise long-term shareholder value, but it does not explain how it will achieve the latter".
The recommendation paves the way for a clash at the pub operator's annual meeting later this month, where a number of directors, including chairman Bob Ivell, also face substantial votes against their re-election.
However, there is no prospect of any of the resolutions being voted down because more than half of the company's shares are controlled by a consortium of investors who include Joe Lewis, the owner of Tottenham Hotspur, and the horseracing tycoons John Magnier and JP McManus.
A spokesman for M&B insisted that the company's remuneration committee "will continue to ensure that any value delivered to our executive directors is fair and appropriate in the context of the performance of the business and experience of our stakeholders."
The pay issue has become particularly sensitive in the wake of a £350m capital-raising announced in January which will see the group of billionaires tightening their grip on the company.
M&B, which also owns the Harvester chain, has seen its finances badly affected by the COVID-19 crisis, with more than 1600 sites closed for the vast majority of the last year.
The company has seen a series of shareholder revolts in the past, with little action being taken to assuage the concerns of City institutions.
The Telegraph reported earlier this week that Glass Lewis, another proxy adviser, was also recommending the removal of Mr Ivell and several fellow directors.