Mintzberg on Bonuses

In an article in the Wall Street Journal (click on title link), management guru, Henry Mintzberg, questions whether directors' bonuses are necessary at all. A very timely question, in my opinion. There is little evidence that bonuses create long term value or that managerial talent is in very scarce supply. My personal preference would be to pay CEOs a fixed multiple of the average salary in the organisation. At least it would stop directors pay increasing faster than the average and it would be an incentive for companies to give a better deal to their low paid workers.