Commonsense fairness - CEO pay

Similarly, any increase in marginal tax for high-income earners would require political will and action.

Finally, the government could develop legislation to facilitate broad-based Employee Share Ownership Plans, as in the US, as well as legislation to introduce participation by employees in decision-making, as exists in most European countries. Involvement by employee representatives on Corporate Boards, plus permanent Employee Enterprise Councils, would achieve much greater workplace democracy. This would ensure transparency, advance knowledge of strategic plans for the business and break down the "them and us" culture. The government draft industrial legislation package now going to the Senate should include such measures rather than sticking with the old adversarial context. There is really nothing innovative in this package.

In the US, where the incidence of obscenely high executive salary packages is greatest, there is evidence that ESOPs (employee stock ownership plans), covering 10 per cent of all employees, act as a brake on executive remuneration.

The National Center for Employee Ownership (NCEO) has conducted a survey on this topic Executive Compensation in ESOP Companies, November 2005. The results strongly suggest that ESOP companies have a much more restrained approach to executive remuneration than many of their non-ESOP peers. Executives in ESOP companies earn less than their peers in similar non-ESOP companies, both in current and deferred compensation.