When Stuart Rose was asked how Marks & Spencer had lured Marc Bolland from Wm Morrison to replace him, Rose’s response was succinct. “They didn’t pay him enough”. Bolland had been on an incentive package at Morrison, and it cost M&S £2.6 million to buy him out. M&S then paid him £975,000 a year, plus the potential to earn two-and-a-half times that in bonuses.

The verdict of the shareholders was that he was worth every penny: on the news of his defection in November 2009, Morrison shares fell and those of M&S rose, swinging the market values of the businesses by £600 million. It’s an extreme example, but the numbers make the point: if shareholders believe that one man will make a difference, the cost of signing him is trivial compared to their rewards, even if his are measured in millions.

Politicians are now scrapping to show who’s toughest on executive pay. Their new-found outrage may help the rest of us feel slightly less bad about our own stretched budgets and frozen salaries, but outrage is easy and policy is hard. The last policy response was the demand for transparency, with directors’ packages published in detail in annual accounts. Remuneration consultants sprang up like bindweed; remuneration reports now typically occupy a dozen pages and shareholders are blinded by complexity.

Today’s call is for simplicity, but that implies the same for everyone, regardless of performance. Even the one point on which all politicians agree, that there should be no “reward for failure”, is hopelessly impractical. Proving failure through incompetence is almost impossible. Even in the most blatant cases, those brought in to pick up the pieces cannot afford to be distracted by proving to the courts that their predecessors were to blame.

Still, it’s clear we’ve reached the point where something must be done. We don’t need a Dangerous Directors Act, but a simple change could bar a quoted company from signing a contract with a new senior executive before it has been approved by shareholders in general meeting. This would go some way towards curbing the more egregious excesses, allowing the board to say: “We know you’re worth it, but the shareholders won’t wear it.”

In practice, those with the biggest votes almost certainly will. It’s not their money, since they are managing it for others and besides, they are handsomely rewarded too. If you’re a fund manager making a million a year, a basic £975,000 may not seem excessive. Those well-rewarded stock pickers don’t always get it right, either. Since that glad confident morning in November 2009, M&S shares have fallen by nearly a quarter, while Morrison shares stand around 15% higher. So was Bolland worth it?

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