During proxy season last spring, a debate about executive compensation erupted that was notable for its ardor and its vacuity. Clearly something is rotten in the state of executive pay. Amid growing worry about the competitiveness of corporations in the developed world, an increasing number of top executives bring home eight- and nine-figure paychecks. There is a growing gap between the remuneration of senior managers and that of ordinary workers.

At the same time, bankers and traders on Wall Street earn fortunes compared with the pay of the men and women who run companies in nonfinancial industries. A handful of top dogs receive lavish treats even when their companies’ stock prices roll over and play dead.

Much of what passes for debate about this topic has been the intellectual equivalent of rounding up the usual suspects: cozy CEO–director relationships, inattentive institutional investors, short-termism, and stock options. All of these are partly guilty. Anyone who has followed my writing with a stalker’s avidity knows that I have a particular bone to pick with stock options, whose purpose is to align managers’ thinking with that of owners but whose effect is to align their interests with those of traders. Stock-optionaccounting sophistry aside, if the goal is to make managers shareholders, why not just pay ’em half their comp in company stock itself, bought in the market at the opening every payday?