George Monbiot tells us that it's just appalling the manner in which executives at companies get to walk away, protected by limited liability, when things go wrong. George has also been known to complain about how much executives at companies get paid. Which is a pity as the two are intimately connected. Here's his suggestion:
As for the executives, I have a tentative proposal of my own. Any managers earning more than a certain amount – say £200,000 – would have half their total remuneration placed in an escrow account, which is controlled not by the company but by an external agency. The deferred half of their income would not become payable until the agency judged that the company had met the targets it set on pension provision, workers’ pay, the treatment of suppliers and contractors, and wider social and environmental performance. This judgment should draw on mandatory social and environmental reporting, assessed by independent auditors.
If they miss their targets, the executives would lose part or all of the deferred sum. In other words, they would pay for any disasters they impose on others. To ensure it isn’t captured by corporate interests, the agency would be funded by the income it confiscates.
The thing is, we largely - imperfectly of course we're human after all - do this right now. And we've been doing increasing amounts of it over recent decades too. It's the explanation for why executive pay has been rising so much. For we do indeed insist that they don't get all their pay as just pay. They get substantial parts of it - the vast majority of any of the large numbers too - in the form of shares. Maybe options, more likely these days restricted stock and good practice these days is that sales can only take part some years after retirement.
The reason for this being that we'd like to make sure that in return for that bounty being paid those executives are in fact hitting those real world targets. That a substantial portion of their pay is at risk is also why the pay is larger. We all do insist upon more money for shouldering more risk.
All of which leads to an interesting point. That if we were to do as George suggests then executive pay would rise even higher, wouldn't it? The more of it is at risk then the more will be demanded simply because we humans do demand higher incomes for shouldering more risk.