With shareholders up in arms about massive pay packages, it's worth looking at two interesting proposals.

The first comes from corporate governance watchdog Regnan which has recommended capping "golden parachutes" and issuing share options that can only be cashed out after five years. In this sort of environment, it's a package that's likely to be considered by politicians.

Meanwhile another proposal from Mercer, reported here, maintains that companies commit seven big mistakes when they reward executives.

The first is basing the package on earnings per share which can be affected by accounting tricks and doesn't account for the cost of capital and the capital structure of the business. The second mistake is relying on total shareholder return which can be affected by affected by factors outside management's control. These can include macroeconomic factors, broad market trends and specific sector competitive issues. Number three is using a "balanced scorecard" which typically places equal weight on different factors when the real world works quite differently. The fourth error is employing measures used by competitors. Another mistake is adopting an overly simple plan understood by everyone. Mercer also says companies mistakenly rely too much on budgets and strategic plans when setting pay schemes. The result is that executives can get handsomely rewarded just by beating a conservative budget. And finally, companies make the mistake of rewarding all their executives with the same sort of program when in reality different business units can have different strategic priorities and therefore need to be rewarded differently.