Many of these points are valid, particularly:
"Many company boards behave more like executive accomplices than as independent guardians of shareholder interest";
"....the underlying problem is that of boardroom timidity and complicity".
See my presentation to GMAA on "Subversion of Boards by Management" --reported by Crikey:
http://www.crikey.com.au///business/2002/12/03-history.print.html
Jeff Schubert
www.jeffschubert.com
Email: schubert@jeffschubert.com
Book "Dictatorial CEOs & their Lieutenants: the cases of Napoleon, Hitler, Stalin, Mussolini, Ataturk and Mao" is forthcoming.

I would like to take you back in time. Say to the middle ages, when a man fortunate enough to have been born into the right family had all the perks and benefits. The serfs and commoners served the King.

The people at the top of the food chain always take care of themselves and the commoners fight for crumbs. Bitter, no I'm not bitter, just a human with a little historical perspective. Nothing much has changed, we're still fighting over peanuts and resenting the elite in power.

The Holy War continues.

Patty Jr.
Yours is not a negative view, it is a realistic one. Why would someone living on $30,000 per annum trying to feed, clothe and educate 3 children have anything else but cynicism for an exceutive who is paid 30 times what he earns, for doing little more than allocating work to others? An executive is also an employee of a company whose remuneration puts cost pressures on the company's wages budget.

It would seem that the company will pay any amount to executives, however to the people who actually "produce" the company's product, the "workers" the company desperately needs to "cut wages" most workers see this as double standards, and know they are already being paid too little. Today's SMH, shows only 16% of workers see themselves as being paid properly, this being the case a backlash may well result against this weeks introduction of Nochoice legislation.

Warren Buffett is the second richest person in the US (after Bill Gates). He is chairman of Berkshire Hathaway and pays himself a salary of $100,000 a year. He is certainly not, in Coyote's terminology, a monkey. (The vast bulk of his wealth is in Berkshire Hathaway shares.)

In his recent annual letter to shareholders, http://www.berkshirehathaway.com/letters/2005ltr.pdf he wrote:

"Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won’t change, moreover, because the deck is stacked against investors when it comes to the CEO’s pay. The upshot is that a mediocre-or-worse CEO – aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo – all too often receives gobs of money from an ill-designed compensation arrangement."

He goes on to describe some of the ways that executives game the system.

Princeton economist and NYTimes columnist Paul Krugman pointed out in a column on March 13 that in the US from 1979 to 2003, the share of income received by the top 10% of taxpayers rose from 33% to 44%. But:

"... most of the gain went to a very small elite. The income share of the top 1 percent went from 9.6 to 17.5 percent, accounting for more than 70 percent of the top decile’s gain. The income share of the top 0.25 percent went from 4.9 to 10.5, accounting for a bit more than half the total gain...

"Does talking about the reality that a very small elite has gotten the lion’s share of the gains sound too, um, shrill?"

Median income has not increased in the US in real terms for the past decade. The benefit of productivity growth is going exclusively to the obscenely rich. This is the direction in which Australia is heading too.

Mike M
And so say all of us....

The American notion that CEOs need to be paid tens of millions of dollars to peform, is a myth, it also contravenes most peoples sense of fairness and justice.

If we look at it globally, American car company executives have been paid megadollars, compared to say Japanese company executives, or Korean shipyard CEOs. Yet Toyota is thriving and booming, whilst
both GM and Ford are on the ropes, not far from going broke. Korean shipyards are running rings around others from other parts of the world. All this achieved without megadollar pay for the tops.

If we look at the Australian scene, again there is no clear connection between high pay and performance. There are more things that drive people, then just money. Ego for instance, passion etc.

At the end of the day, CEOs are employees, risking none of their own capital, just their time and reputation. The trick is to find good ones, no matter what their level of remunaration