The how's and why's of CEO salaries in Asia

HOW much should a chief executive be paid? CEO compensation is a topic that draws much interest, even contention, not least because of the brow-raising numbers that hog the headlines.

While salary is accepted generally as a reasonable incentive for head honchos to run the organisation well, a common question often arises: Are chief executives helping themselves to a larger slice of the pie than they deserve?

From a survey of 536 CEOs at 402 listed firms in East Asia over an eight-year period, I found that corporate governance is a crucial determinant of how much CEOs get paid above the "industry average". It also plays an important role in linking CEO compensation with firm performance.