"I think it is important and will become much more the focus of attention to ensure that remuneration schemes operate in a way that is lined up with the long term interests of the owners of the business. There has been far too much focus on payments that are very short term focused, people who pick up the tab for short term profits, without having to bear the costs of long term impairments. At the end of the day I think it is right for the market to set compensation levels but it must do so in a way that is consistent with the long term interest of the market as a whole and the shareholders' of a given institution in particular."
Which shareholders though? And what if those shareholders are themselves rewarded for generating short-term returns? And if they are agents (ie fund managers managing say pension fund money) what's their incentive to manage pay in anything other than a tokenistic manner?
I'm not being cynical (honest) - I just think we really need to get beyond the idea that 'shareholders' as they currently exist and are currently incentivised have a strong pull to play the ownership role, including getting remuneration at investee companies right.