For the past 30 odd years, executive compensation at virtually any publically owned limited liability company or board, council, etc., has been spiralling out of control, without any checks or controls by those who effectively own them: the people.
The practice of using compensation committees and compensation consultants has been used to make lame excuses as to why greed is good and more greed is better.
As you may see from the attached article, two thirds of Britain’s highest paid council bosses won pay rises last year despite Government orders to slash their salaries, and in spite of the council cutting staff and services, but this is only the top of the iceberg; publically listed companies and councils, etc., around the western world have been annually paying fees to so-called compensation committees or consultants to grant themselves more and more compensation, whether that be in salary, stocks, stock options or bonuses – I have never heard of a compensation consultant or committee that recommended a reduction in compensation to the hand that feeds them.
What is the solution you may ask ? The solution is to let the people who pay the pipers vote on any current pay levels and any future pay increases by the use of individual votes…no, not by allowing overpaid mutual fund managers or pension fund managers to vote..but the individual taxpayers and shareholders.
In the case of public council executives, etc., governments should legislate pay levels for all council executives and let them all get another job if they don’t like it !