The 30-year history of spiralling executive remuneration has largely been one of unintended consequences. Major initiatives designed to rein in the post-1980s money grab by executives were not only ineffective but aggravated the situation — to the benefit of the executives.

First up was US president Bill Clinton’s plan to restrict excess generosity by hiking the tax rate on payments over $1m. Wily executives and their consultants promptly devised an easy walk-around. The guaranteed cash portion of remuneration would be restricted while incentives were paid out in share-based awards that enjoyed favourable tax treatment. Thanks to soaring equity markets, this quickly resulted in rich executives becoming millionaires and then multimillionaires...

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