2 . "outside directors" must take the lead in this, for they are not personally affected and are free from suspicions of conflict. However, in practical terms they must counsel with and cooperate with the chief executive because the executive compensation package is an essential tool in the discharge of his responsibilities. Ideally executive compensation should fluctuate when the fortunes of the shareholders fluctuate and in the same direction. However, the percentage changes need not be of the same magnitude. Conversely what is undesirable is to have the two move in opposite directions. In a going concern the shareholder benefits in only two ways - through dividends and through appreciation in the price of his shares. Therefore it follows that the greatest harmony between an executive compensation program and the shareholders' interests exists when the program is related to stock ownership or at least to changes in dividends and/or changes in the market price of the shares. Experience has shown that it is rarely practical to relate all of the executive compensation package to fluctuations in the shareholders' fortunes. To attract good people the starting place is a competitive salary and fringes that compare favorably with other companies in the industry. The "incentive" features or additional benefits are more useful in retaining good people and in making certain that the best of the people are not tempted to go elsewhere. Experience has also shown that boards of directors can justify higher incentive payments and are inclined to be more