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The cheques for the posts.

Document Cited in Related
Vincent
AuthorFraser, RS
PositionLetter to the Editor

"Spent forces" (September) argues that shareholders have become "willing to do something" about excessive payments to failed directors. I fear that this is complacent. There have been a few outcries against outrageous abuses, and many more are not challenged because of the wide belief that this is the way of the world.

Here are some of the excuses:

* The number of two-year contracts has reduced, and most firms now recruit directors on one-year contracts. But, if the director is not made responsible for doing the job satisfactorily, the company may have to pay a year's wages to a failure. Such one-sided contracts are irresponsible and stupid.

* CEOs need to take risks to maximise their firm's value. But, if they are not prepared to do what the job requires, they shouldn't take it on. It's also claimed that they have little job security. The average tenure of a CEO of a FTSE-100 company is actually four years. This may not belong enough to complete a turnaround, but it isn't short either. Most people have little job security and no massive payoff.

* There aren't enough good senior executives, so they must be well rewarded. Not "all CEOs are motivated solely by money and not all want to emigrate to the US. It is easy to survive on 600,000 [pounds sterling] a year.

* You pay for what you get. Too many companies are paying for what they...

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