The revolt about fairness in corporate tax is now turning towards executives' pay
I have yet to meet an executive of an Irish stock market company who does not blame very high executive pay on the fact that companies have to publicly disclose how much they earn. Every time I have had a conversation about this issue with an Irish plc executive they try to argue that things really started to go wrong when companies were obliged to publish a breakdown of the pay of every director of the company.
Their argument is that for example, a finance director of a certain sized company can see what finance directors of similar firms are earning. If he/she earns more, they say nothing but if they earn less, they point it out.
They place the blame for exponential growth in executive remuneration in the last 20 years, firmly at the door of publishing salaries.
Having heard the argument made many times, I am still not at all convinced.
What are they saying, stop publishing how much we all earn and it will fall? Yeah right!
The simple truth is that many senior executives in large quoted companies are grossly overpaid and the reason is a system failure at board level. Reforming that system would be very difficult and would require a major change of attitude which could only come from a major international backlash against executive pay.
But there are signs it is coming.
Last week CRH became the latest company to receive a shareholder revolt over executive remuneration.
Around 40pc of shareholders voted against a new plan that could earn CRH chief executive Albert Manifold an annual bonus of more than €8m.
The motion to grant Mr Manifold a maximum annual bonus payment of up to 225pc of his salary, as well as a share plan of up to 365pc of pay over the coming years, was passed.
Mr Manifold defended the pay scheme afterwards, acknowledging that he is "well paid" and the bonus was based on achieving very onerous performance targets, which if achieved would ensure shareholders did very well too.
The sizeable vote against CRH came after a proposed pay structure at British engineering group Weir, was rejected by 72pc of shareholders. Similarly, 49pc of shareholders at Shire, a Dublin-registered listed company voted against a 25pc pay increase for the chief executive granted last year, which took his fixed salary to $1.69m and his overall pay to $21.6m in 2015, a fivefold increase.
A few weeks ago almost 60pc of shareholders at petroleum giant BP voted against a £14m pay package for the chief executive in a year in which it reported record losses, cut thousands of jobs and froze its employees' pay.
So what is going wrong? Firstly, the transparency argument doesn't stack up. The scale of these massive remuneration packages actually reinforces the need for full disclosure of who earns what at the top.
Chief executives are part of the problem but ultimately their pay structure and targets are decided by a remuneration committee, which is a sub-committee of the board. The chair of the remuneration committee plays a vital role. Inevitably a huge amount of its work is around making comparisons with peer companies.
Vast improvements in corporate governance and disclosure were made following the recommendations of the Cadbury Report in 1992. One of the members of the committee behind that report, Synergy Holdings chairman Peter Brown, said recently that outsiders need to be put on remuneration committees.
He backed the shareholders who opposed the recent BP chief executive remuneration and said "the make-up of remuneration committees, was and still is, badly flawed by the exclusion of any outside members."
To some extent this may call into question the independence of "independent directors" who sit on boards because they are supposed to be outsiders. But Browne elaborated the pressures around pay awards that can happen.
"The tensions generated if executive directors are not, in their view, properly rewarded by non-executive members of the remuneration committee can lead to very difficult relationships."
A working group set up by the industry body, Investment Association in the UK, recently concluded that executive pay was "not fit for purpose."
The mechanisms put in place to ensure the creation of long term value in a company is suitably rewarded don't seem to be working.
Share options were a one-way ticket to riches for many executives and they have been somewhat discredited. Their replacement, the LTIP or Long Term Incentive Plan, is now also being seriously questioned.
To go back to engineering group Weir, it planned to pay out 55pc of a long term incentive plan to its chief executive in restricted stock. It turns out he would have got paid this amount over five years without needing to hit targets. The company said however, that the "total opportunity", as it is sometimes called, would have been reduced to 1.6 times salary.
Small shareholders in these huge corporations have very little say, because they have few votes. Big institutional shareholders are the ones who have to carry their influence.
Yet, they often don't question executive pay very much at all.
They only voice concerns when things aren't going well for them. The truth is that the corporate world runs on a pack mentality. Everybody likes to run with the herd. Executives who run the investment companies, who in turn own shares in these large plcs, don't want their pay structures called into question.
Some of them are inordinately rewarded executives of investment funds themselves. Glass houses and stones come to mind.
But in recent days, one big beast of the global investment community has got involved. The Norwegian sovereign investment fund has warned that it is targeting excessive executive pay at companies in which it invests.
This is the largest single investment fund in the world and has around $830bn. This is all the money the Norwegian state made from its oil industry over several decades. The Norwegians haven't spent any of it and the fund keeps getting bigger.
It owns the equivalent of 1.3pc of all of the world's major listed companies.
Yngve Slyngstad, chief executive of the fund, told the 'Financial Times' that the absolute level of pay - not just the way deals were structured - was becoming an issue.
"We have so far looked at this in a way that has focused on pay structures rather than pay levels. We think, due to the way the issue of executive remuneration has developed, that we will have to look at what an appropriate level of executive remuneration is as well," he said.
Really tackling exorbitant executive pay requires something of a culture change. Chief executives earning over 200 times the average pay of employees in the company they run have to ask some serious questions.
Let's say a remuneration committee shuts down a proposal to award a chief executive the potential to earn €25m over the next three years. Instead he can only earn €15m. Is that a disincentive for him to do his job? Will he not try harder, despite earning €5m per year?
Equally, will the chief executive walk away and go find a €25m job. It is highly unlikely.
The revolt against international tax avoidance is now turning to executive pay.