You know that brain-drain problem the Sibson Consulting VP mentioned here while pointing out flaws in the recently enacted pay caps for bailout executives?

Hogwash, says old-school investment banker John Gutfreund, who maintains that critics of the curb are whining.

“People got spoiled,” says Gutfreund, the former Solomon Brothers head honcho who was famously portrayed in Michael Lewis’s brilliant 1989 book Liar’s Poker. “There’s always someone else coming up the ladder.”

Gutfreund and another (in)famous Wall Street personality provide fresh and slightly contrarian analyses of the bailout executive-pay limits. You might not like the latter figure’s personal governance record, but his insights on executive pay limits are well supported.

In his new role as a Slate business columnist, former New York governor Eliot Spitzer lays bare what’s wrong with President Obama’s $500,000 compensation cap for senior bailout executives and what can be done about it.

What’s wrong?

In his latest column, Spitzer says the limit is arbitrary –- too high in some cases, too low in others. It also applies to too few executives and can easily be dodged with some basic compensation program engineering. He also believes government is “inept” at setting private-sector wages.

What can be done about it?

First, Spitzer writes that the SEC should issue an authoritative report on flaws in compensation decisions at major companies (an effort that includes subpoenaing reports from compensation consultants and comp committees to “reveal the biased methods they used to calculate pay” and the “pressures they felt from their CEO clients”).

Second, compensation consultants should be selected by a special shareholder committee rather than the board of the CEO.

Third, members of board compensation committees should be completely independent of the CEO, says Spitzer: “They must have no other common board memberships [with the CEO], no overlapping charitable causes, no shared social clubs.”

Fourth, senior-executive pay should be determined by a binding shareholder vote.

“If we are to stop outrageous pay,” Spitzer writes, “the objective should not be to match the foolishness of the Bush ideological embrace of wild-eyed libertarianism masquerading as capitalism with an equally foolish ‘government knows best’ approach that ignores the market. We must create a genuine market for CEO services, generating meaningful competition and socially acceptable results.”

If the gossip is to believed, Spitzer ought to rethink his aversion to writing. ###