The main question facing everyone involved with executive compensation is simply: How much is enough? The often large sums of money that executives receive have outraged many investors and columnists, but in a free market economy the best go to the highest bidder and the same thing goes for CEOs. No company wants to pay its CEO below that ever-increasing median either lest they face losing their leader. So, how does one remedy this situation?

Well, The Blue Ribbon Commission on the Governance of Executive Compensation in Canada conducted a study on the matter and came up with a very simple solution. The committee suggested that at the heart of all the controversy is the simply matter that most investors are just not aware of where these figures are being derived. Consequently, they believe that the single most important thing that companies can do is simply justify the compensation amounts in regulatory disclosures. This means not only disclosing all those members who had a say in the compensation amounts, but also disclosing exactly what performance measures pay figures are tied to and why. By explaining these figures in plain english, the commission believes that many problems can be avoided.