PUBLICLY quoted companies in the US and Britain must disclose to shareholders the pay and perks of each of their top executives. But companies quoted on the Irish Stock Exchange only have to reveal the aggregate amount paid to all their executive directors.

Which policy is in the best interests of shareholders and all the other interested parties ranging from employees to the executive directors themselves?

In its latest guidelines, the Irish Association of Investment Managers (IAIM) has called for the disclosure of all elements in the remuneration package of each individual director by name. These elements would include basic salary, benefits in kind, annual bonuses and long-term incentive schemes including share options. The IAIM wants the Irish Stock Exchange (ISE) to amend its listing rules to require Irish publicly quoted companies to make these disclosures.

And the Tanaiste and Minister for Enterprise Trade and Employment, Ms Harney, has warned that if the ISE fails to do so, she will introduce legislation to force full disclosure.

Under the current requirements, Irish public companies only have to disclose the aggregate amount paid to non-executive directors. This aggregate must be broken down into aggregate amounts for salaries, bonuses, pensions and benefits in kind.

As the owners of the company, the best attempt shareholders can make at finding out how much each executive is costing them is to calculate an average remuneration per executive - divide the total aggregate figure by the total number of executive directors.

But this figure should not be taken as the amount paid to the chief executive or managing director - he/she is likely to be paid much more than the average, which will have been brought down by the amounts paid to lower ranking executive directors.

Averaging can be misleading - an averaging exercise on the remuneration of executive directors of the AIB Group for 1994 revealed an average of £600,000 (€761,843) per executive. Following a furore over the size of the average payments, AIB then disclosed that the average emoluments of its Irish executive directors was not £600,000 but £450,000 - the group average was skewed by the £1.17 million cost of the bank's US executive director.

If averaging is misleading, is that not an argument in favour of more precise disclosure?

Ms Harney argues that shareholders have every right to know what each individual director is paid, or, more accurately, what the shareholders are paying the executive team to run their company.

Executive directors are running the company on behalf of the shareholders, she argues, and unless there is openness and accountability, there is a danger that they could be enriching themselves at the expense of the shareholders. "If the Taoiseach has to disclose his financial affairs, it's not reasonable for directors of public companies to be excluded from a regime of openness, transparency and accountability," she says. One argument advanced by the IAIM is that since shareholders never vote to appoint the board as one unit but vote to appoint or reappoint individual directors, they are entitled to know the remuneration of each director so they can make informed decisions. Shareholders cannot judge whether executive directors are being paid too much or too little if they do not know what they are being paid, one fund manager argues.

"Investors don't deny that executive directors have big responsibilities and they are prepared to pay them well. But to make a decision on any executive director and his/her value to the company, they must know the remuneration involved," another argued.

The ISE reviewed its listing requirements on disclosure last year. It decided not to change its requirement that aggregate remuneration for executive directors be disclosed, broken down into aggregates of salaries, bonuses, pensions and benefits in kind. The issue is now under consideration again in the light of the IAIM report and the comments of the Tanaiste. Managing director, Mr Tom Healy, argues that the current ISE requirements go beyond those suggested by the company law review group and provide greater disclosure than that required in most other euro zone member-states.

Increasing the level of disclosure required could discourage companies from going public, damaging the development of the stock exchange and therefore shareholders in the long run. He points out that current disclosure requirements in the euro zone do not stop US investors investing in euro companies.

However, more detailed disclosure requirements have not hampered the development of the US stock market or indeed the number of Irish companies seeking a US quotation.

As one source suggests, there must be a strong rationale behind disclosure when the big institutions in the US insist on it. That rationale, he maintains, is that you cannot stop empire building and opportunistic emoluments to executive directors at the expense of shareholders unless you know exactly what is going on.

The defence that executive directors do not decide their own remuneration - it is set by a committee of non-executive directors - is dismissed by proponents of disclosure.

"Those committees operate on a very limited information base. How can shareholders judge if executive directors have any influence on the outcome when there is no transparency. Wider disclosure would help the committees. They would be able to benchmark their pay levels against other companies," one source suggests.

Dismissing the argument that shareholders should be content with disclosure of the aggregate paid to executive directors on the grounds that they then know the cost of the executive team, disclosure proponents point out that executive directors are not hired as a team but as individuals.

Other arguments against disclosure range from possible risk to the commercial position of the company to potential difficulty in recruiting or holding on to top level executives. But those arguments do not stand up to too much scrutiny.

US and British companies account for 60 per cent of world equity market capitalisation. Companies in these markets have been operating successfully under the wider disclosure rules for many years. The argument that disclosure would be a threat to the security of top Irish executives is equally invalid given the experience in the US and Britain and that so called "business" kidnappings in the Republic appear to have targeted people whose salaries were not published or who owned/ran private businesses generating big cash flows.

Are opponents of greater disclosure seriously arguing that top executives in the Republic are at more risk than their counterparts in Northern Ireland companies quoted on the London Stock Exchange whose remuneration is disclosed?

While there may be some sympathy for executives who argue that in a small State, disclosure would mean their neighbours would know their pay and perks, dismissing the call for greater disclosure as no more than "prurient self-interest" is no answer.

"That is just a joke. It might be gossip for a day, a 24-hour wonder. Don't tell me that the neighbours don't know more or less what people are earning. They see the jag, the yacht and the high lifestyle, so you can be sure the salary will come as no surprise," says one fund manager. The real embarrassment for executive directors is more likely to come at review meetings with senior managers, another fund manager suggests. Senior managers might have strong views on how much their executive directors are being paid, especially in relation to how much they are getting themselves, another fund manager warns.