Salary caps are appealing but, Allan Fels writes, stronger corporate governance is needed.
Chief executive pay has risen by more than 250 per cent in real terms since 1993, though it fell 140 per cent in 2007-08. It has risen from 18 to 50 times average weekly earnings, fuelling community concerns.
As well as notable individual cases of excess, there have been some periods of apparent general excess, especially in the 1990s, when executive pay was introduced.
Even so, chief executive pay in Australia is well below that in the United States, Britain and Germany for comparable companies, and in line with smaller European countries. And much of the rise can be attributed to the effects of globalisation and increased company size. For example, BHP Billiton's market capitalisation rose from $16 billion in 1989 to $244 billion today.
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