If you want to know why nothing is done to curb excessive rewards in the boardroom, look no further than the latest crop of annual reports from the big life insurance companies. How the life assurers handle their own top pay is important because they are also major institutional shareholders in other companies.
Unlike small private shareholders, they have the clout to stamp out greed and expose hypocrisy. If the gravy train is to be stopped, or at least slowed, it will have to be through the auspices of the insurance industry.
Unfortunately, the auguries are not good. Life assurers have gone through the worst year in living memory, clobbered by sliding investment returns. Bonuses to policyholders have been slashed. Surrender values have been chopped. Some companies have survived only because of a relaxation of the solvency rules. Most have had to cut the dividend or go to their shareholders for emergency capital, and sometimes both.
If ever there was a year when you'd expect the directors of these companies to be exercising restraint, this would be it. But there is no sign of it. True, some "performance bonuses" are down, but one wonders why bonuses are being paid at all, when most life assurers' share prices have halved. Moreover, substantial increases in base pay, plus the usual array of other perks and incentives, have left most insurance chiefs better off than ever, even in this, their annus horribilis.
It makes it all very difficult for them to complain about excess pay in the companies they invest in. How, for example, can the Pru, which owns a swathe of UK plc, complain about rewards for failure in other boardrooms when its own chief executive, Jonathan Bloomer, has just been paid more than £1m in a year when the Pru was forced into a humiliating scrapping of its dividend policy? How can the Norwich Union group Aviva point the finger at excess elsewhere when its own boss, Richard Harvey, collected £1.42m in the same year that his company racked up £2.5bn losses and slashed the dividend?
How can Standard Life criticise others when its chief executive, Iain Lumsden, received a £122,000 bonus (taking his pay to £619,000) in the year it admitted losing £4bn in the stock market and repeatedly slashed bonuses for its policyholders?
The same goes for Legal & General, whose chief executive, David Prosser, was paid £1.55m in a year in which the L&G share price halved and he went cap in hand to shareholders for an extra £780m to beef up the balance sheet.
Perhaps the most blatant reward for failure was at Royal & Sun Alliance, another influential institutional investor, which gave a £1.4m pay-off and a £325,000-a-year pension to its former chief executive Bob Mendelsohn, a man whose stewardship of the company led to £1.25bn of losses, a slashed dividend and P45s for thousands of staff.
These five institutions alone probably own between 10 and 15 per cent of most British blue chips. They could be the force for good. Instead, they are constrained by their own egregious rewards. To be fair, some of these business leaders are hard-working and talented; it's unjust to put Prosser and Bloomer in the same category as the hopeless Mendelsohn. But there is something deeply unsettling about these bosses not sharing one iota of the pain of their customers, shareholders or staff.
Next time their trade body, the Association of British Insurers, which has rightly campaigned to curb rewards for boardroom failure, calls for restraint, it risks hoots of derision.
I wrote six months ago that the widespread dumping of defined benefit pension schemes for new staff was in danger of turning a whole generation of employees into second-rate citizens. Many employers were retaining the schemes for existing staff while offering new recruits inferior "money purchase" schemes, which guarantee nothing.
Now for the first time an employer running such a two-tier system - the Financial Services Authority, as it happens - is trying to redress the balance. Its employees in the inferior money purchase scheme - basically those hired since 1998 - are getting a 6.7 per cent pay rise, while their colleagues on better pension terms are getting 4.2 per cent.
The finance union Unifi calls the move "immoral and wrong". I don't see why. It seems perfectly reasonable that those employees disadvantaged on the pension front should be compensated in other ways. It should help prevent resentment among younger and more recent recruits. But the union is right to predict that other employers will follow suit.
The gap between employees in the two categories of pension scheme gets ever wider and only a monster recovery in the stock market will start to narrow it.
Patrick Hosking is deputy City editor of the London Evening Standard