I am reeling from a conversation I have just had with someone I had always thought to be one of the more independent remuneration consultants. He told me that the reason chief executives are paid so much is "market forces", and that journalists never write anything positive about executive pay. Where has he been—huddled in a cave?

The notion that there is an international market in chief executives was firmly quashed a couple of years ago by former Hermes boss Sir Alastair Ross Goobey in a report that found no evidence of a brain drain to the US and demonstrated that executive pay is higher in the UK than anywhere else in Europe.

What's more, in defence of my profession, the media pounces gleefully on stories of chief executives forfeiting pay, principally because they are so rare. For example, BP boss Lord Browne's second pay cut in a row made the headlines last month, accompanied by comments that it was a responsible answer to the recent safety failures in the US.

In any case, you can't really blame journalists for reporting on a problem that survey after survey shows is mounting, and which is a cause of growing concern to investors, unions and the public at large. A report from the Work Foundation (WF) found that for the year to summer 2006, the average FTSE-100 CEO remuneration package increased by 28 per cent, to over £2.4m, compared to inflation of 2.8 per cent and average wage increases across the whole economy of four per cent. Performance-related pay made up 55 per cent of the total.

Director's own Good Director survey found business leaders uncomfortable at being judged by extravagant executive pay and corporate failure.
The WF report also blew a hole through the old arguments of risk and reward that are habitually trotted out by those seeking to justify rising chief executive pay (typically the executives themselves and their remuneration consultants, "Ratchet, Ratchet and Bingo", as Warren Buffett calls them). Just one FTSE-100 chief executive was made redundant in the year under review, compared to the national redundancy rate of 0.58 per cent, and his fall from grace was cushioned by a £5m payoff. No wonder execs live longer than the average worker—another of the report's findings.

The danger is that increasing numbers will make a beeline for the private sector, where, free from public scrutiny, regulation and accountability that have curbed executive excesses over the past 10 years, they can earn truly stellar salaries without anyone knowing about it.

Growing pay inequality corrodes the basic concept of fair reward that underpins society. And the more cynical stakeholders become about boardroom pay, the greater the threat to firms' long-term success, with further knock-on effects on employment and the healthy local communities that allow businesses to be successful in the first place. It's a vicious circle. The founder of one philanthropic family business I spoke to recently took issue with the concept of business in the community, arguing that business is an essential component of the community, not something separate. He is right.

But the disproportionate returns that accrue to the owners of some private equity firms, along with the secrecy of their methods, suggest that they see their operations as being outside the normal boundaries of society, and it is a sad indictment of them that personal greed far outweighs broader societal considerations.

The system as a whole isn't broken: "The public company is a great concept and we lose it at our peril," says Nick Isles, author of the Work Foundation report. But the way we reward people at the top of the ladder does seem to be broken, try as we might to fix it through corporate governance reforms.

The Work Foundation has called for a High Pay Commission to be established, along the lines of the Low Pay Commission, but with the objective of setting a national maximum, rather than a national minimum, wage. It's a bold idea, and it would need the right leadership to be successful. With that in mind, I hear Lord Browne could be on the lookout for a new job rather sooner than he planned.