South Africa's Financial Mail looks at the gap between executive and worker pay (note that the figures presented are in South Africa Rand, which currently exchanges for 0.132 U.S. Dollars):

SA's wealthiest and lowest salary earners continues to widen. Figures released by the presidency last week showed that earnings of the average SA worker grew by only 4%/year over the past five years. This contrasts with research by the FM showing that 171 executive directors of the top 40 JSE-listed firms took home R2,7bn last year - nearly R16m each.

The pay gap has become a target of trade unions, which are increasingly citing high executive pay to justify above-inflation-rate demands for salary hikes.

Perhaps a better measure is the amount paid to directors as a percentage of the company's average pre tax profits over the past three years.

For shareholders, anomalies can be seen in companies like Uranium One, which made an average profit of only R18m over the past three years, yet its directors made R76m last year, including a R52m gain from options.

But is it a zero-sum game? Does CEO pay have to drop to narrow the difference? Mark Bussin, chairman of 21st Century Pay Solutions, says there is no proven link between higher levels of executive pay and lower levels of worker pay. " The view might be that you're robbing Peter to pay Paul, but executive pay is still rising faster than the lower levels in countries that are far more equal than SA," he says.

Ultimately, Bussin says, this becomes a moral discussion. "Is it right to pay someone R5m/year and another person R50 000 when they both buy the same food and fuel? " he asks.

In the wake of last month's WSJ article, Human Resource Executive Online takes another look at lavish death benefits for CEOs, also known as "golden coffins:"

Mel Fugate, an assistant professor of management and organizations at Southern Methodist University in Dallas, says golden coffins are yet another symptom of outrageous executive pay that's been tolerated for far too long by shareholders.

"Activist shareholders have been bringing resolutions asking for the right to vote on executive-compensation packages, and they've been voted down in almost every instance," he says, adding that a resolution was easily defeated at ExxonMobil's most recent shareholders meeting.

"In most cases," he says, "the majority of shareholders are large institutional investors and folks who are in bed with one another. They're not interested in change."

Golden coffins have also been pushed by compensation consultants, who are, in many cases, brought in to justify excessive compensation packages, says Fugate.

"They impress upon the board the need to 'stay competitive' with a list of 'comparable firms' by offering these perks," he says. "It's all about keeping up with the Joneses. And no one says, 'No.' "

From Seeking Alpha's Richard Shaw:

Executive compensation is a difficult issue.  Although we grant that the challenge in designing a reasonable system that works in all seasons is daunting, in the net we come down on the side that the compensation is too often too great.

We believe that the incentives are not adequately designed by objective third-parties  — highly compensated directors who like their pay and serve at the pleasure of the CEO are not objective third parties.

Now with the moral hazard element associated with government rescue of financial institutions, the possibility of truly unjust enrichment of banking executives looms large.

Many bank executives received large salaries and large bonuses for the growth and illusory short-term profits associated with mortgage lending and mortgage securitization that landed us in the current mess.

Some lost their jobs as a result of massive losses of shareholder equity, while being shoved out the door with huge sums of severance pay.

Now we face the issue of executive stock options issued recently during this period of deeply depressed bank stock prices.  Will they balloon into great riches for executives who happen to be at the helm when the Fed, the Treasury, the Congress and ultimately the tax payers bail-out the banking system?

As the Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) saga continues to unfold and taxpayers realize that any government bailout could be $30 million less if their CEOs weren't grossly overpaid for driving the companies into the ground, a legislator wants to condition any possible intervention on salary controls.

Pennsylvania Democrat Bob Casey said such large pay combined with poor management makes it fair to "question the prudence" of any government assistance to Fannie and Freddie, but if assistance is offered it would be only if executive compensation is capped "at reasonable levels."

Regardless of where one stands on the executive compensation debate, legislative intervention is unarguably fair if tax money is going to be used to effectively rescue pseudo-private companies and their shareholders.

Justin Rood of ABC News points out how the CEOs of Fannie Mae and Freddie Mac broke the bank with their compensation last year as they literally began breaking banks with their management of the mortgage giants:

Daniel Mudd, the CEO of Fannie Mae (NYSE:FNM), received $11.6 million in salary, stock and other compensation for 2007. Richard Syron, CEO of Freddie Mac (NYSE: FRE), took home about $18.3 million last year.

In addition to Syron's salary, stock options and a $3.45 million bonus, Freddie Mac paid for a number of other perks for Syron, such as a car and driver, a home security system, travel costs for his wife, even $100,000 to pay his lawyer to negotiate his employment contract with the bank.

"Yes, yes," said Freddie Mac spokeswoman Sharon McHale, when asked if Syron's leadership was worth $18 million a year. "He's done a lot."

"That is the most outrageous of the current financial disasters," well-known bank analyst Richard Bove of investment firm Ladenburg Thalmann told ABC News. The crisis, he said, was caused solely by "mismanagement, for the purpose of massive personal aggrandizement. It's an outrage."

The Economic Times of India suggests giving directors a more complete set of tools to set executive pay with:

1. Market Assessment
2. Internal Pay Equity
3. Wealth Accumulation
4. Profit ‘set-aside ’

Market assessment [is the] first step in conducting a market assessment is ‘Peer Group Selection’ in light of the level of role complexity and job worth differences. The appropriateness of the peer group is an important issue that is raised constantly by members of remuneration committees.

Some say that CEO pay should be roughly twice the amount paid the next management level, and that a differential by a factor of two is ‘felt fair.’ There seems to be something to this ratio, in that the difference in every ‘real’ level of work would lead to a doubling of pay.

Another approach to determine executive pay is to set wealth accumulation targets over a number of years, given a pre-determined level of performance. Once executives start to exceed these levels, pay would be adjusted in terms of future base pay increase or future equity awards.

The final perspective on determining pay is to set it in relation to the company’s profits or net revenue , as is done in many ‘professional’ service firms, such as by investment banks, private banks and consulting firms. For example, among the investment banks or commercial banks with a substantial investment banking arm, total compensation and benefits typically constitutes between 30% and 50% of net revenues.

Forbes features an Oxford Analytica article drawing the obvious connection between poor company performance and complaints around CEO compensation:

Increasingly poor corporate performance, in the context of the current U.S. economic downturn, has raised shareholder discontent regarding governance and executive pay issues. This has fueled a slew of proxy challenges and demands for reforms to promote "shareholder rights."

Changes in corporate compensation practices are likely, but the most far-reaching moves are likely to be implemented by companies themselves, rather than by government regulation. In the case of troubled sectors such as finance, reforms may be applied to compensation standards for all employees, rather than focused on the senior executive level.

Imagine you are a CEO with a clause in your contract stipulating the company is liable for any legal fees you incur as a result of your job - sounds fair enough. Now, imagine that the legal fees you are incurring are related to a criminal investigation into whether you fraudulently manipulated your pay as CEO - delicious, isn't it.

On Tuesday just this occurred when Westar Energy Inc. (NYSE: WR) was ordered to pay former CEO David Wittig $1.67 million for legal bills related to a criminal case brought in 2003 alleging he used schemes to inflate his compensation while masking it from shareholders. After a long legal soap opera, Wittig is scheduled to go on trial for a third time in September on circumvention and conspiracy charges.

Though Wester is suing Wittig for breach of contract that would nullify its need to pay his legal bills, in the meantime they are on the hook. It's not bad being CEO...