The point is,” wrote Donald Trump in 1988, “that you can’t be too greedy”. History has since proven him right. According to all estimates, compensation for US executives has been rising at a far swifter pace than wages of average workers since the 1970s. Even at the top, pickings have been a little leaner in recent years than at the height of the millennium boom. Nevertheless, executive pay re-emerged as potent political issue in the mid-term elections, with the options backdating scandal adding extra ammunition for critics.

As in Britain, however, would-be reformers should remember the intended consequences of previous attempts to meddle with managerial compensation. After all, the back-dating mess as well as the flood of stock options more broadly was largely the result of how these were treated for tax and accounting purposes.

In the US, options originally gained popularity in the 1980s in response to shareholder pressure to link pay more closely to performance. But they only came to dominate compensation packages after 1993. That was when Congress decided companies could no longer claim executive compensation above $1m as tax deductibles, unless it was linked to performance.

Options priced above the share price at their issuance fit the bill. And, thanks to intensive industry lobbying, their effective cost was not even recorded in income statements on until last year. Taken together, those rules meant that companies had a license to seemingly print money for compensation purposes and get a tax break on top of it. They created massive incentives to use options – and to make sure they were priced favourably.

Most other countries avoided similarly foolish arrangements. As a result, it is no wonder that numerous academic studies have found options to be both a key contributor to the growth in US executive compensation during the 1990s – and far less prevalent elsewhere in the world. Reversing their impact, though, is likely to prove tricky.

Among the many reasons for why today’s US executives continue to earn more than most of their predecessors and counterparts in other parts of the world, one often overlooked one is history. From shareholder activists, to management gurus as Peter Drucker and Michael Porter, critics have long had a point when arguing that in aggregate, US executive pay levels appear to be well above what might be needed to secure adequate performance.

But unlike the prices of most goods and services, levels of executive pay seem to have more to do with whatever the going rate is, than the costs providers had to incur, say to get the necessary training. That should encourage shareholders to exercise more discipline – but also prompt lawmakers to strengthen the rights of investors, rather than trying to meddle with compensation directly.