APROPOS the reaction to Dr Smurfit's remuneration arrangements and his penchant for horse racing, perhaps the salary structure for the Smurfit Group chief executive which treats him less like an owner and more like a jockey offers a useful role model for determining bosses' pay in general.

Two economists from the London School of Economics this week drew a correlation between the business of horse racing and managing by incentive, suggesting that senior executives should be paid "prize money", like jockeys, to ensure pay mirrors performance. Retainers, such as large basic salaries, are seen as a recipe for poor performance, whereas a reward system weighted towards bonuses and share options provided a better stimulus for success. "Unless perceived to perform well they will not attract any rides the threat of dismissal is ever present."

While Dr Smurfit and the other captains of industry at Epsom on June 8th are unlikely to swap the owner's coat for the multi coloured livery of the racing jockey, they could at least reflect on the payment mechanism influencing the performances they will witness on the racetrack.