THE almost 90% reduction in the total remuneration of three executive directors of Investec suggests banking bosses may be reacting to disquiet over excessive executive pay and the link between their compensation and performance.

Investec said on Friday that CEO Stephen Koseff and MD Bernard Kantor - who were paid a total of £3,4m last year - received £450000 each for the year ended March, an 86,8% cut.

Group finance director Glynn Burger was paid £370681 - an 88,2% cut from £3,1m previously.

Investec said the three executives had forfeited their performance bonuses in a year when the specialist bank and asset manager posted disappointing results.

Analysts and investors welcomed the move.

"I think it's just an alignment of management packages with the performance of the bank - and it's the right thing to do," Avior Research banking analyst Faizal Moolla said.

In the year to end-March, Investec's diluted headline earnings per share fell 28% to 25,4p, hit by impairments that doubled in Australia, a weak global economy and low levels of activity.

Operating profit dipped 17,4% to £358,6m.

Karl Leinberger, chief investment officer of Coronation Fund Managers, which holds 7,7% of Investec, said the pay cut was "very shareholder friendly and a sensitive move at a difficult time for the group".

Paul Theron, an asset manager and CEO of Vestact, also said it was the right thing to do.

In April, Citi Group noted a disconnect between Investec's operational performance and the compensation of executive directors. Citi said that between 2007 and 2011 Investec's return on equity slid from 27,4% to 11,2% - yet directors' compensation had remained at the same, or even higher levels, than in 2007.

Investec has also reduced the total fees earned by its chairman to £250000 for next year, from £400000 this year. Basic nonexecutive directors will receive £65000 per year next year compared with £62000 this year.

Investec shares have risen 16% to R48,01 from the 52-week low of R41,31 on May 21.