It's all in the (copper-bottomed) contract

Fat cats like Dick Grasso have given big money a bad name - yet we all want more of it. Check the small print and you just might get it, advises Andrew Saunders.

by Andrew Saunders

JK Galbraith, the Canadian economist and self-styled scourge of corporate America, once noted that 'The salary of the chief executive of a large corporation is rarely a market reward for performance. It is frequently more in the way of a warm personal gesture from that individual to himself.'

That was more than 25 years ago. But despite the inclemency of the economic climate and increasingly strict rules on the disclosure of (and hence the need to justify) senior executive pay, there have been plenty of cases in more recent times where this harsh maxim still resonates.

If you take 'salary' to include the exotic cocktail of benefits, bonuses, incentives and pension contributions without which any self-respecting captain of industry will not get out of bed these days, then shareholders of many of our top companies might recognise the spirit of Galbraith's edict even today.

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