What is more interesting is why it keeps on rising. According to the Right, and those who cling to the idea of rational markets at work, this pay is deserved because directors take big risks and can get fired, plus companies have to attract the best so need to pay the going rate etc. For a run-through of the defence try reading the Telegraph business comment section for a few weeks. It turns up there pretty regularly.
For those of a more sceptical mind, the Corporate Library in the US has just put out some research, covered by Reuters, which found that...
U.S. companies that hire compensation experts tend to pay their top executives more but that does not translate into higher shareholder returns.
Guess what, when you employ those firms that advise you on what to pay yourself, they don't tell you that you are being paid too much, quite the opposite. And what is more those performance-related elements of pay don't seem to effectively incentivise... err... performance. One word of warning here. It's not clear if causality has been established. It's possible that companies that tend to employ consultants tend to be bigger and tend to pay more.
A second point worth considering is that if these levels of pay are so shocking, why aren't shareholders kicking off about it. Of course most readers will be aware that by 'shareholders' we are talking mainly about fund managers, since most pension funds delegate voting to their appointed managers. And when you look at the voting records of fund managers (which is not easy in the UK, but let's leave that one for now...) they vote against a small proportion of remuneration policies.
So is it fair to conclude therefore that fund managers are largely happy with exec pay in the UK? I have seen one fund manager argue that we should just "get used to it". If this is the predominant view (and the public doesn't agree) is it time to take voting power away from them?
Final point on this rant. I have serious doubts that there is a really a market at work in any meaningful sense in the seeting of executive pay. The Work Foundation has trashed this idea quite effectively. I would also point people to the views of Patrick Gerard, who has tried to get the OFT to look at whether there is in effect a cartel at work, and Lucian Bebchuk.
One thing I am sure about. Whilst we continue to rely on fund managers to police executive pay we will continue to see reports like the IDS one.