[deccan]

Baron Munchausen,

Here's a peace offering, my idea of a specific, clear and legitimate grievance against how many corporations operate, excerpted from the 17th October 2003 issue of The Economist. The issue concerns the wage inflation of bosses of corporations.

One of the first things that the Motorola search committee did was to follow the standard procedure of selecting a recruitment consultant to help them - in their case, the well-established firm of Spencer Stuart. To determine what a new CEO's salary should be, consultants make use of benchmarks. For Tenet Healthcare's new boss, for example, the comparison was with "compensation levels and opportunities made available to executives at the company's peer companies".

This has the effect of continually ratcheting up bosses' pay. No selection committee wants to award their new choice less than the industry average. That will, they feel, not attract the best man to the job, and it will also suggest that their company has settled for someone less than average. Since the tenure of top bosses is getting shorter and shorter, this ratcheting effect is accelerating, especially in Europe where, according to a recent report from consultants at Booz Allen Hamilton, the turnover of top CEOs has almost tripled since 1995.