Michael Murray: Some well-managed companies run big risks by underpaying directors

I don’t usually take much notice of the level of directors’ pay in the companies in which I hold shares because in most instances the impact of excesses (usual) or parsimony (rare) – for good or ill – is marginal. But surprises and scandals sometimes jump out.

A big surprise these days arises when it turns out that a chief executive is underpaid for his performance relative to his (or her) peers. When ...