Who will take a stand on executive pay?

Which would you rather have for £43m a year: one Martin Sorrell, CEO of advertising group WPP, or 650 British MPs? That's the question Kate Burgess asks in the FT today.

I suspect that most business people would rush for the Sorrell option, even if they baulk a little at the fact that his package includes £274,000 for his wife's air tickets. But it is still a question that draws attention, yet again, to the bonkers packages large listed firms offer their management.

More examples? How about the £11m bonus being paid to Harriet Green of Thomas Cook (despite her firm's horrible, horrible mishandling of the deaths of two small children in one of their villa holidays in Corfu). Or perhaps the £8m pay check going to relatively inexperienced Burberry chief exec Christopher Bailey.

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Add it all up, and FTSE 100 directors saw their incomes rise by 21% last year to an average of nearly £3m each with the big payments very skewed towards the top management. It is all, as Anthony Hilton puts it in the Evening Standard, "excessive, unnecessary and undeserved".

There has been movement here recently. Several big shareholders say they are planning to vote against Sorrell's pay this year for the first time (ordinary investors could have made their feelings known at WPPvoteNO.org, but it is too late now I'm afraid). Fidelity has started voting against remuneration reports at meetings unless long term incentive plans run for five years rather than three.

And a few weeks ago, Legal & General Investment Management called for executive salaries to either be capped or to rise in line with those of the general workforce although this is useless if the variable part just keeps going up and up.

A report from the High Pay Centre (funded by Lord Sainsbury) has suggested that the long-term incentive plans (LTIPs) be scrapped outright, and Daniel Godfrey of the Investment Association has started on a review of how executive pay structures might work better.

But shareholders have to do more to get their voices heard, and the fund management industry has to be forced to do better. A lot of their foot dragging is down to the fact that asset managers are just as grossly overpaid as FTSE 100 CEOs.

Who might like to get started on this forcing? How about Lesley Williams? She is to be the new head of the National Association of Pension Funds. Who better to take a stand on the matter than the person seemingly in charge of making sure the UK's 1,300 pension schemes look after the interests of ordinary investors first?

And who better to point out that looking after ordinary investors means taking a very firm stand on executive pay and the skewed incentives it creates? You can read our previous writings on those incentives here and here, for example.