EXECUTIVE PAY : CLEGG WRONG AGAIN.

I am no supporter of the executives of companies who are paid vast amounts of money for questionable levels of performance. The arguments for and against the inroduction of controls have been well aired in the media, but the reported measures to be be put forward by the Government are a nonsense.

The pay of senior executives is determined by the Remuneration Committee of each company; these committees are composed of non-executive members of the Boards, these member aften being executive members of other Boards. Inevitably, there is the risk of an incestuous relationship developing which leads to a "You scratch my back and I'll scratch yours" approach to pay determiniation. This is fundamentally wrong and should be stopped, the question is "How ?"

Ultimately, every publicly quoted company is owned by its shareholders and it is for them to decide whether of not they are satisfied with the companies' management. It should not be for the Government to interfere; have we not seen enough of the consequences of Government involvement in major industries in the past ? It is also not for the workers to decide who gets paid what, as is now being proposed by Nick Clegg; the suggestion that there should be worker representation on Remuneration Committees is farcical. In essence, this would mean union officers sitting alongside Board members, being made privvy to highly confidential personal information and being asked to make determinations for which they are ill-suited and inappropriately positioned. The whole idea is a muddle-headed piece of socialist nonsense and why David Cameron should agree to it is a mystery, unless it's as a trade-off for Liberal Democrat acquiescence to more Conservative policies.

To my mind, the answer to Boardroom pay inflation is simple and doesn't require any grand political gestures. Firstly, anyone serving as an executive in one company should be barred from serving as a non-executive for any other or, at the very least, from serving on its Remuneration Committee; secondly, the objectives by which senior executives are assessed should be clear, concise, easily understood and easily measurable. There should be no woolly wording capable of a range of interpretations and the level of performance should be assessed by a body separate from the Remuneration Committee; this body could, indeed, include representatives of the workforce and, even, other interested parties. Finally, ordinary shareholders have to be strongly encouraged to become much more involved in the determination of the extent to which executives have, or have not, achieved their objectives and in the determination of the appropriate level of remuneration. Companies should be required to make it much easier for shareholders to access the necessary information and to express their views, in full knowledge of the relevant facts.

Clegg's proposals are unnecessary and wrong. Workers do not own their companies, except in a few specific instances, and should have no role in determining the pay of their managers; if they are given such power, the result will, inevitably, be anarchy and chaos.