Take Barclays Bank. Its boss Bob Diamond picked up a US$20.1 million (S$25 million) pay package last year but under him, the bank is attracting all the wrong types of publicity.
Apart from tax avoidance and fat bonuses, Barclays stirred up a huge political storm in Britain last week after paying a US$450 million fine for trying to manipulate a widely followed interest rate - the London interbank lending rate or Libor.
Its anguished shareholders felt the pain immediately, watching the share price crash by almost 16 per cent last Thursday.
To rub salt in the wound, Mr Diamond could get a king's ransom of £20 million (S$40 million) if he resigns, according to the Daily Telegraph newspaper.
Across the Atlantic, JPMorgan Chase boss Jamie Dimon earned a US$23.1 million pay package last year but his reputation has taken a hit following revelations of a US$2 billion trading loss in a supposedly safe division of the bank.
It reinforces a perennial gripe among shareholders that some entrenched managers are enjoying the good life, demanding spectacular amounts of money, despite delivering a less than stellar performance.
Shareholder unhappiness is not confined to developed markets such as the United States and Britain. Investor angst is growing in our own backyard too.
The announcement to renew the contract of Singapore Exchange boss Magnus Bocker for a further three years generated grumblings.
One blogger, identifying herself as Aunt Lucia, claimed that the fresh contract amounted to giving Mr Bocker a 33 per cent rise in his annual base pay. She wrote: 'After what he had done in 2010 in the abortive attempt to swallow ASX (Australian Securities Exchange), it makes me wonder what his pay rise would be, had the attempt succeeded. Quadruple or more?'
To be fair to Mr Bocker, the new pay package from his contract renewal is likely to be the ongoing market rate for paying a top executive. A fresh hire would have demanded as much, or even more, yet there is no guarantee that he could deliver.
But one can also commiserate with the unhappiness expressed by some shareholders. Since Mr Bocker took over 2� years ago, SGX's share price - the ultimate mark of a boss' tenure - has plummeted by about 20 per cent.
In contrast, the benchmark Straits Times Index is up 3.9 per cent over the same stretch despite the regular roller-coasters it has had to endure.
About 20 years ago, when the last big debate over executive remuneration erupted, the solution had been to pile on stock options, long-term incentive plans and a host of other equity-based rewards to make company executives think like investors.
The refrain has always been that companies that pay less get 'caretaker managers'. Top executives must be paid a lot, because otherwise they might slack off, or move to greener pastures.
But some have questioned if that would be too self-serving. What is the chance of a boss going home early if he is paid $3 million rather than $6 million?
'Zero, I would imagine. He values things like everyone else does - pride in his creation, pleasure in deal making, the public spotlight. That is only human,' wrote the Financial Times chief business commentator John Gapper.
The problem is that every company boss wants to be paid as much as his peer as a matter of self-respect, he added. The others, in turn, demand the same privilege, and this has caused chief executive pay to escalate to the point where millions are the norm and those who are paid less feel cheated.
Will this spiral in executive pay continue? Yes, until shareholders get so tired of the huge sums they are paying chief executives just to do their jobs and give them the boot.
In a few cases, this has already happened. Chief executives regarded as being overpaid for underperformance such as Aviva's Andrew Moss have been turfed out of office.
But Britain, who gave the world the industrial revolution 200 years ago, wants to lead the way again - this time on pay reform - by going one step further.
Its government wants to give shareholders more teeth to fight with company bosses over remuneration by having a binding vote on pay every three years.
The move - if it goes ahead - is sure to have ramifications on the rest of the world, since executive pay is a guaranteed hot-button issue everywhere.
Some British company bosses may try to call the government's bluff by threatening to leave if they are paid less.
It would be interesting to watch the reaction of shareholders as they respond to the threat. Will they react by begging them to stay, or tell them to 'shove it' and make way for the executives one level beneath them.
The outcome will surely set the stage for a shake-up on top executive pay all over the world.
engyeow@sph.com.sg
