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By editorial@silicon.com, 17 June 2002 17:00

COMMENT Everyone has a market value. If you're David Beckham, it's going to be slightly higher than if you're magician's assistant Debbie Magee. Some people command preferential treatment just because of who they are - take members of the Royal family for example - others, such as sales people, are paid purely on their performance. But where do the highly paid CEOs at the helms of failing companies fit in? They rake in the cash while the companies remain in decline. These executives are normally answerable to a very powerful and very demanding group - their shareholders. These are the people who own the company and their rage is understandable when, like we saw with Vodafone, the value of the company plummets while executive salaries continue to climb. The latest controversy relates to the finance director at struggling cable company Telewest, whose shares have enjoyed a 52-week high of 111.25p but are now worth just four pence. In front of shareholders, Charles Burdick failed to acknowledge his pay rise of £40,000 - taking his annual salary to £400,000 - despite a statement from the company's chairman, Cob Stenham, that there had been an across-the-board pay freeze. While the company is dismissing claims it misled shareholders, the latest furore has no doubt increased tensions between executives and shareholders and highlights very clearly how sensitive the issue is. If one of the most important jobs of a CEO is to deliver value for shareholders, surely pay must be included as a factor. But who will be the first so-called Fat Cat to take a genuine pay cut - including bonuses - and bring his or her salary back in line with their true market value? Judging by the goings on at Telewest it's likely the impetus will come from the shareholders and not the board. And when that happens, it means that in essence the chief executive does not have the shareholders' best interests at heart.