SHAMEFUL and irresponsible - that was how US President Barack Obama described Wall Street bankers after he learnt that they were preparing to pay themselves tens of billions in bonuses even as their banks were begging the government for some US$700 billion to stay afloat. After paying themselves bonuses of some US$33.2 billion in 2007, Wall Street's financial workers paid themselves more than US$70 billion in discretionary bonuses at the end of last year, as their industry was plunging into the worst slump since the 1929 stock market crash.

And last month, reports had it that the surviving bigwigs at several of the most distressed firms - which had laid off thousands of employees and closed down business divisions all over the world - were about to pay themselves another US$18 billion. The latest outrage is over British government-rescued Royal Bank of Scotland's plans to pay its executives £1 billion (S$2.22 billion) in bonuses. Much of the money will go to senior executives who are now out of a job after having driven their bank over the edge.

But shameful or not, greed remains the name of the game in an industry dominated by alpha-male types who can't comprehend the extent of their folly. Mr Obama is calling for an unprecedented US$500,000 per year cap on payouts to senior executives of banks that come hat in hand for government bailouts. The British government is now leaning in a similar direction.

While bankers may be directly responsible for the global financial crisis, they don't have the monopoly on greed, hubris and excesses. The practice of top executives rewarding themselves with huge payouts which have little to do with personal performance has become increasingly common. A glance at various corporate reports - even those of Singaporean firms - will reveal glimpses of this generosity.

It is time for all industries, and not just banks, to take a long, hard look at their remuneration policies. The rewards paid to high-flying corporate bosses have to be in tune with shareholder returns. Executive remuneration, and especially bonuses, must be put to shareholder votes. Shareholders should also have a much bigger say on performance targets and tie bonuses - whether cash or stocks - directly to them.

Granted, it is always tricky to decide how much to pay. Each industry and each company has to set its own benchmarks. But the objective here is to achieve accountability and transparency. Shareholder oversight is critical to achieving this. Will this put off top talent? Under current circumstances, it would be hard to discern the 'talent' of those who caused the current mess. A sensible, transparent and target-defined reward system will go a long way towards ensuring stable and sustainable corporate and economic growth.

This article was first published in The Business Times on February 10, 2009.