They used to be known as the silent majority, but not any more. Instead of just rubber stamping multimillion dollar pay deals and excessive share options, investors are taking a more radical stand. “No” has finally crept into their vocabulary.

In the US and Europe, share-holders are taking a more aggressive approach to executive pay with the latest high-profile case involving Burberry, the British luxury brand that has cut a stylish swathe across America and Asia.

In what was one of the biggest boardroom revolts in British corporate history, investors voted against the £28 million ($47.8m) pay package for chief executive Christopher Bailey. It was only the sixth time that a major British company has seen its pay arrangements scuppered in a ballot.

“The message to Burberry is loud and clear – multimillion-pound pay packages are obscene, unnecessary and will damage the economy in the long term,” Deborah Hargreaves, director of the High Pay Centre, told The Daily Mail newspaper.

Since taking over as chief executive earlier this year, Bailey’s bulging pay cheque has raised eyebrows. As well as a basic salary of £1m, he receives up to £6.6m from two annual incentive schemes. Topping that up is a free share option worth £1m for the former Royal College of Art student, who has helped increase the value of Burberry from £1.1 billion to £6bn.

“If those at the top are seen to grab such vast rewards while wages stagnate for everybody else, it completely undermines public faith in business,” said Hargreaves.

That has already started to happen. Since 1978, there has been an explosion in boardroom salaries. In the US, chief executive pay has jumped by 725 per cent whereas salaries for ordinary employees have only edged up by 10 per cent. This has been fuelled by blue chip companies eager to sign the brightest and the best.

But according to a study by Michael J Cooper of the University of Utah, Huseyin Gulen of Purdue University and P Raghavendra Rau of the University of Cambridge in England, companies with the highest-paid chief executives rarely get their money’s worth.

As pay increased, the report revealed, the overall performance of companies stagnated.

“Higher-paid managers exhibit behaviour consistent with overconfidence,” the study concluded. “Further, these overconfident [chief executives] invest more, engage in more mergers and experience greater negative returns to the announcements of these mergers relative to other [chief executives].

“Most importantly, we find that companies with highly paid [chief executives] earn significantly lower returns when the [chief executive] is also overconfident. We also find that firms managed by highly paid [chief executives] experience lower future operating performance.”

But does this research from the academic world translate into the real world? Well, the case of British Petroleum’s catastrophic Deepwater Horizon oil spill off the Gulf coast of America in 2010 mirrors those conclusions.

Under chief executive Tony Hayward, BP lost public respect over a series of media gaffes before suffering multibillion dollar law suits. Hayward eventually lost his job.

“There is another school of thought that [chief executives] are just too highly paid, period,” Cooper told USA Today. “The US is pretty egregious as far as the ratio between median pay and what the [chief executive] makes.”

Corporate America has never shied away from excess. On the contrary, it has embraced it. Earlier this month, Ford’s brand new boss Mark Fields received a 13 per cent increase in his pay packet on his first day at work. His salary jumped from $1.54m as chief operating officer to $1.75m as CEO, while his new package is worth $5.25m plus substantial share options.

To put all this into perspective, data compiled last year by the American Federation of Labour and Congress of Industrial Organizations (AFL–CIO) showed that pay at 327 of America’s biggest companies reached $12.3m or the equivalent of $7,000 an hour. That was 350 times more than an average worker’s pay of $20 an hour, according to Bureau of Labor Statistics.

Naturally, within the rich, there are the uber rich. Eric Schmidt, chief executive of Google, made just under $101m last year. Again, that was roughly $48,548 per hour or about $809 per minute. Since the average worker in America is paid about $35,204 a year, Schmidt was making more money in an hour than most of his fellow countryman earned in 12 months.

“I’m shell-shocked. I can’t believe this can go on,” John Bogle, founder of the Vanguard mutual fund company and a long-time critic of chief executive pay, told USA Today. “I can’t believe owners of these companies can’t take a bigger stand.”

At Burberry, they did. Maybe the silent majority has finally found a voice.