Is there really such a thing as a global market in talent for top executives?

Whilst compensation consultancies (wonderfully dubbed “Ratchet, Ratchet & Bingo” by Warren Buffet) would have us believe that such a market exists for talented individuals and therefore Boards of Directors should benchmark their executive’s pay against global peers (strangely those “global” peers only include highly paid Western managers and not the Salarymen of Japan, nevermind the poorly paid managers in Third World countries), it seems hard to comprehend that most executives would uproot their families (and pull settled children out of schools) and move to another country.  There is also the risk from the employer’s point of view that the new foreign hire will not seamlessly blend into their new company’s culture and mix easily with the existing staff.

It is probably true that newly qualified MBA students are the most willing jobseekers to look globally for a position, but managers who have been in situ for a while are likely to have put down roots in their local communities and would be killed by their spouses for even suggesting moving their 2.2 kids and the family dog to e.g. Singapore.  As a nation, the Dutch seem to have managers who make a success of it abroad (e.g. Marc Bolland of MKS and previously MRW) whilst football managers are very well travelled (Guus Hiddink has managed successfully in many countries).  However it is arguabe that football is not strictly a proper business as it seems to be a hobby for very wealthy owners and a goldmine for talented players.  In that sense football is similar to investment banking in that the players/bankers seem to end up with all the money whilst someone else bears the losses…

Boards should stop wasting money on Ratchet, Ratchet & Bingo and use some common sense instead. These recessionary times provide the perfect opportunity to resist the ever-upward cost of executive compensation packages (the argument runs that surely each of our executives deserves to be paid upper quartile pay or we otherwise admit that, by definition, we have sub-standard managers).