Americans and executive pay watchers around the world are extremely excited about the Securities and Exchange Commission's proposal to force businesses to disclose the gap between what the CEO is paid and what the typical rank-and-file employee receives. While not wanting to rain on this particular parade, it is necessary to point out that the history of efforts to restrain excessive executive remuneration is littered with unintended consequences.The biggest boost to executive pay levels across the globe had its origins in the US president Bill Clinton's efforts - back in the 1990s - to discourage high pay by spiking tax rates on pay above $1-million. The response was the introduction of share-based awards, starting with share options and gradually moving on to more exotic stuff.story_article_left1Share-based awards have been the source of unimaginable wealth for executives, first in the US and then across the globe, ever since. For executives and remuneration committees they have the considerable added benefit of being opaque. Hardly anybody understands just how much wealth is transferred from the company to its executives through share-based awards.The next big unintended consequence was the response to demands for disclosure of executive pay details.In the late 1990s, US regulators rather naively thought disclosure might embarrass executives into exhibiting some restraint. They hadn't calculated for the fact that this particular group of people proved to be totally "unembarrassable". And so the reverse happened. These shameless individuals used the publicly disclosed details of their peers to justify ever-higher pay levels - the concept of ratchet and ratchet was born.The most obvious weakness with the new pay-gap proposal revolves around how to account for executives' share-based awards. It is inevitable that the full value of the top executive package will be fudged with "explanations" that payment is uncertain because vesting of the awards is conditional on certain performance criteria being met.After a few years of this type of obfuscation, US regulators may decide that banning all share-based awards and only allowing cash remuneration is the best thing to do.Barclays AfricaThe ability of remuneration committees to sidestep regulations is well demonstrated by our own Barclays Africa Group. Faced with the EU's new requirement that bonuses cannot exceed 100% of fixed pay, Barclays Africa's canny remuneration committee invented "role-based pay". This is a huge sum of money that is added to fixed remuneration and so provides loads of room for generous bonuses.CEO Maria Ramos received R6.5-million as role-based pay, bringing her total fixed pay to R14.2-million. This meant there was regulatory room for her R14.4-million of bonuses.But it gets better. Ramos's role-based pay was paid over three years in the form of share appreciation rights. Less than a year later those rights are currently worth over R7-million. Yet more unintended consequences.Lessons from China's SOEsThe idea that South Africa could learn from China's state-owned enterprises (SOEs) is a tad scary. Of course, there is always room for learning from other people's experiences but China's SOEs prevailed and many thrived because the Chinese government was able to throw so much money at them.Another considerable benefit for the management of China's SOEs is that they are rarely subjected to the sort of scrutiny our own parastatals have to contend with.story_article_right2Believing there are almost unlimited amounts of money available and that taxpayers and other citizens have no right of access to information are not the sort of lessons we should be teaching our SOEs.Also on the China front, this week's controversial "depreciation" of the yuan drew attention to the currency's dramatic appreciation over the past 12 months - up 14% against the dollar and a massive 25% against the euro. That the country manages to export anything, including huge amounts of cheap steel, does raise the spectre of widespread government support for its industries. Much of this is in the form of cheap energy and finance.Lewis and the battle for changeLewis Stores chairman David Nurek was in fighting mood at Friday's annual general meeting (AGM). He launched the meeting with a 25-minute monologue in which he attempted to undermine the substance of the challenges facing the group, as well as the integrity of the challenger.After two hours of increasingly heated exchanges between the "Lewis camp" and the challengers it was difficult not to conclude that Lewis will have to alter many of its sales and accounting policies if it hopes to hold on to its strong share-price rating.The company is going to face increasing scrutiny. Even if the National Credit Regulator backs down, Lewis will face court action that will require a more nuanced approach than the one used at the AGM...