ANN CROTTY: Taking good care of the cronies
‘Benchmarking’ justifies inexplicable greed
There’s something not quite right about the chairman of a remuneration committee talking earnestly about the dangers of inequality when his committee has just approved a multimillion-rand retention payment for an executive on the basis of nothing more substantial than a “benchmarking” exercise. The assumption we’re expected to buy into is that once a benchmarking exercise is done the remuneration committee’s job is over; it has fulfilled its obligations to the board and the shareholders. There is no requirement to exercise any discretion. This means all the committee need do is appoint its expensive remuneration consultants to get information about what the most popular practice is and present that as a benchmarked policy. In doing this, there is the attendant assumption that there is a clearly demarcated market for executives. What a cop-out. At the least you have to wonder: why bother with the remuneration committee members, who are essentially well-paid middlemen? Their task seem...
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