Social investors have long been interested in executive compensation. The pay packages of CEOs occasionally attract attention from the mainstream press, too, and the June 12 issue of The Economist weighs in on the issue.

Three different articles consider executive pay, and they follow different paths to the same general conclusion. Yes, the authors agree, it’s possible that companies overpay their executives – especially in the U.S. – but it’s hard to say how much compensation is too much. The first article, “Pay Attention,” includes this sweeping statement:

“It is near impossible, of course, to determine the correct absolute level of executive pay.”

Difficult, yes, but near impossible? “Correct absolutes” may be elusive, but shareholders must have some means of evaluating an executive’s bang for the buck.

The second Economist piece, “Fair or Foul?” acknowledges as much. “Most institutional shareholders have the know-how to judge if plans are in their interest or can hire outside experts to do so.” The key concept is “interest.” Are shareholders provided with an opportunity to apply their own metrics to executive compensation, or does executives’ “interest” take precedence?

“Let the Fight Begin” offers some explanations for how executive pay rates are set:

“Managers’ pay has grown faster than workers’ pay, but the reasons for this are not sinister. Whereas workers’ pay depends on the labour market (and has been kept down by the huge numbers of people joining the global economy), managers’ bonuses are chiefly tied to returns on capital.”

The causes of skyrocketing pay packages may not be “sinister,” but investors cannot turn a blind eye to executive compensation, especially when it affects the value of their holdings. Shareholders can be frustrated, however, when they try to flex their “ownership” of the corporation. If investors believe they’re not reaping results commensurate with executive salaries, they can typically do little more than vote directors on or off the board, or else sell their shares. The “Say on Pay” movement is shareholders’ response to this relative powerlessness.

Perhaps it’s time to re-examine the claim that managers’ pay is “chiefly tied to returns on capital.” The opportunity cost of high compensation is the business of every stakeholder, including employees, consumers and the community – not just shareholders.

KLD’s SOCRATES database notes the compensation policies of thousands of publicly-traded companies. SRI research can help measure the true cost of executive compensation, and help corporate leaders participate in building a more sustainable world.

For a thorough consideration of “Say on Pay,” also see “Say What? The Battle over Executive Comp” at CFO.com.