Make money -- make toilet cleaner

Richard Lambert, the editor of the Financial Times, spoke to business 'leaders' recently and told them that excessive pay levels posed a risk to the rest of the planet taking them seriously. They would be regarded as creatures from another planet themselves unless pay levels were reined in. This might be bad for their businesses, thought Mr Lambert.

What no-one has yet seemed to comment on though, in all the debate about excessive levels of executive pay, is the dangerous consequences such greed will have for the next generation of businesses. In short why should anyone take all the risks, all the heartache, all the punishment , year after year to grow a business from scratch -- if the rewards they gain at the end are less than the head of a company which makes toilet cleaner can take home in one year?

It's the shareholders, stupid

£90m in pay for a man who sits at the top of a company which makes toilet cleaner. £28m for a man who presides over a business that has as the chair of its remuneration committee the wife of the MP who claimed for moat cleaning. 'Sir' Stuart Rose demands £800000 for being an executive non-executive and the DG of the CBI (ex-editor of the bankers' house paper, the FT no less) warns executives that they risk they being regarded as aliens unless they get their snouts out of the trough. The average remuneration of the boardroom fat cat has moved up to about 80 times that of the average employee (from about 40 times ten years ago)

Yes -- something is wrong somewhere. And mostly it's with the shareholders. The reason things have got to this pass is because the shareholders -- the institutional ones where the clout is -- didn't bother to stand up for good governance. That's where reform should take place.