Vodafone is braced for a bumpy ride over its new boss’s multimillion pound pay package as it prepares to face investors at its AGM this week.

Sky News understands that one of the main shareholder advisory services, IVIS, has urged caution over the FTSE 100 telecoms giant’s decision to pay Margherita Della Valle a substantially higher salary than her predecessor, Nick Read, who was effectively ousted several months ago.

Vodafone is no stranger to public rows over executive pay, although it was unclear whether it would face a severe backlash at Tuesday’s annual meeting.

It reported a mixed picture of its trading performance on Monday, with price rises contributing to higher-than-expected service revenues, even as its customer base in Germany, a key market for the company, saw sharp declines.

IVIS, which is run by the Investment Association, has given Vodafone’s pay report an ‘amber-top’ alert, which suggests that shareholders should carefully scrutinise their decisions before casting their votes.

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Glass Lewis, another service, has recommended voting against the remuneration report, while Institutional Shareholder Services has said it deserves “qualified support”.

A Vodafone spokesman said: “Our remuneration policy – the three-year framework – and our annual remuneration reports have been strongly supported at previous AGMs.

“ISS is supportive of our new policy and this year’s remuneration report, and we are confident that we will see good support from our shareholders this year too.”

On Monday, Vodafone announced that Luka Mukic, a former finance chief at the German software giant SAP, would replace Ms Della Valle as CFO.

Shares in the company were trading around 4% higher on Monday, giving it a market capitalisation of £20bn.

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