The Australian Shareholders Association says the so-called two strikes rule has brought cultural change to the corporate sector, with companies now seeing a negative vote as a message to "clean up their act".
As the curtain falls on the annual meeting season, the number of companies registering first strikes against their remuneration reports is down significantly compared with last year, according to early-stage analysis from the ASA.
ASA spokesman Stephen Mayne said the fact that no big-ticket company copped a second strike this year - after falling foul of shareholders last year - showed that companies were responding to the no vote.
"It's definitely working, I'd say extremely well," Mr Mayne said yesterday. "Companies have been forced to sit up and take notice."
The rule, introduced in 2011, means shareholders can force a board spill if more than a quarter of votes oppose the remuneration report for two years in succession.
Mr Mayne said not only had the rule given shareholders a voice, it forced boards to seriously negotiate with executives over remuneration issues.
"There has been real and meaningful reform," he said. "And it has addressed the problem it set out to tackle.
"If you go back and look at the list three years ago (when the legislation was first introduced) the list (of first strikes) was much bigger again."
David Jones, Aurizon Holdings and Southern Cross Media were some of the big names to cop a first strike this year. Locally, Automotive Holdings and Perth-based IT company ASG experienced heavy protest votes.
Although there has been criticism from some that the rule allows shareholders to pursue an agenda rather than protest against executive pay, Mr Mayne said those agendas, say with David Jones, were pretty transparent.
Proxy adviser and founder of Ownership Matters Dean Paatsch said the first strike rule had had a "positive unintended consequence". "It's a non-binding vote, but directors are anxious to avoid any form of public sanction," he said. "The spill mechanism . . . provides focus and it's been converted into meaningful dialogue between investor groups and major company directors."