Current modern CEO's would seem to have much in common with the medieval Robber Barons.

I think James raised a very valid issue in his first post. A close friend of mine - a successful business manager who has been turning around stagnating companies since the '80s - has recently been undertaking a study (yes, skeptic, at one of those universities you rail against) into 'short-termism' in business. A significant problem that prevails in business is the obsession with short-term goals and arbitrary performance indicators:

'in order to receive a bonus, you must increase revenue by 10% over the next 12 months'

'in order to receive a promotion, you must cut our running costs by 5% over the next 9 months'

'in exchange for a one-off bonus of $500,000, I will reorganise the business so that we can reduce maintenance costs by 3% over 3 years'.

Those sorts of things.

The contention is that they do nothing for business in the long term. Goals are met (at any cost) and rewards are paid. The wunderkind of business takes the praise, writes a new entry in his resume and goes on his merry way.

I, unlike so many, have no problem with CEOs earning many millions of dollars. I don't know what they do with it, but if that's what good business practices cost, I have no problem with that. The key word, though, is EARNING. Effective businesses need to set their goals in the long-term. As with James's power grid example, a short-term goal leads to long-term losses. We need to keep CEOs comfortable while they work towards the big goal, but we should not reward them with such enormous figures until they have ACHIEVED that big goal and managed to sustain their achievement.

The case of Ansett airlines is representative how short term goals, destroy the viability in the long term.

Each takeover, meant little more of the assests (the cream) were transferred to another company.

The gas explosion at Mobile refinery from my understanding was a direct result of the management reducing perventative maintenance, as a result victorians experienced rationing of gas supplies for a long time.

Whilst the 2003 article quote seems to reinforce the importance of the guy at the top… I'm not sure whether it means the guy at the top (sorry women executives) has to be good. Particularly in light of this from the Financial Times (online): 'Two chiefs could be wiser than one' by John Gapper, 20th of April 2011, includes

"Among the spectacular failures of two strong-willed executives failing to get along at the top were Sandy Weill and John Reed of Citigroup, who became co-chief executives for a brief, unhappy period after the 1998 merger that formed the banking group. Their rivalry became so intense that they went to the board to demand that it choose between them (it chose Mr Weill)."

Why do CEO salaries seem to operate in the opposite way to the rest of capitalism's markets?

Is there a relatively simple solution for public companies?

What about public calls for tenders for the position of CEO – LOWEST bid wins!

For the record I am prepared to undercut the lowest bid for the position of CEO of the Commonwealth Bank by 10% or $500,000pa, whichever is the lesser. Contact details are available through GrahamY.