It shouldn't be too much to ask public companies to tell investors how much they pay the top executives. Nor should it be a problem to base that pay on the executive's performance. But it's been a big problem.

It's an issue of accountability. Boards need to be held accountable for the CEO pay deals they approve. At the same time, those packages need to be set up so that CEOs are made accountable for their jobs.

Shareholders are speaking their minds. More than 40% of IBM's shareholders recently voted for more disclosure and tying more pay to performance.

Transparent is Good

"The more transparency you have, the more accountable Boards are going to feel," said Brian Andriuzzo, co-founder and chief financial officer of Lafayette, Calif.-based compensation consulting firm Syzygy Consulting Group. "If they have to do a better job of explaining their rationale, they'll do a better job of making pay more reasonable."

Pay won't go down, Andriuzzo says. But if what he calls "rather obscene" pay hikes of 30% or more in a year are cut in half, that would point to progress.

Meanwhile, performance-based pay--when done right--more closely ties top managers' interests with those of shareholders. The key is to make sure the Board sets goals that line up with what shareholders want, say Carol Bowie. She works in Washington, DC, as director of governance research at proxy advisory firm Institutional Shareholder Services.

In some cases where that hasn't happened, pay has surged even as share prices and performance fade.

Home Depot Chief Executive Robert Nardelle was the poster child for that this year. In the past five years, he made about $200 million. Shareholder returns fell 13%.