"Markel is a 79-year-old specialty insurance company that went public in 1986. The vice chairman, Steve Markel, is the founder's grandson and incorporated its approach to shareholders from Warren Buffett's Berkshire Hathaway.

"The letter to shareholders starts off by addressing them as business partners. Executive compensation is based on performance and focuses on the long term. All executives get competitive salaries in addition to benefits packages.

"Bonuses are paid based on growth in book value over a five-year period, and substantial portions of the bonuses are paid out in restricted stock.

"There are no stock options awarded to management and all senior managers are expected to own shares. Many of them own many multiples of their salaries in Markel stock.

"The company has in place a payroll deduction plan and offers low-interest loans to encourage stock ownership among its associates. As of the end of 2007, more than 10% of the outstanding shares were owned by associates.

"When Markel has a good year, everyone from top management to shareholders benefit. And it has had many good years since going public. Book value has increased more than 20% per annum over the 21-year period.

"At Staples, executive compensation is broken down by base salary, performance-based cash bonuses, long-term equity incentives, and retirement benefits. Base salary is set at the middle range (50th percentile) of comparable positions in the company's peer group.

"Bonuses are based on performance measured by sales (20%), earnings (30%), return on net assets (30%), and customer service levels (20%). The maximum bonus in any one year can't be more than $4 million.

"The company's 10-K report provides actual examples of how total compensation was determined for top management. There is nothing pushed under the rug here.

"What is of interest is the requirement of each executive officer to have stock ownership based on a multiple of his or her salary.

"The CEO must own stock valued at 5x his salary, the CFO and COO at least 4x their salaries, and other officers ranging between 2x to 3x their salaries.

"Perhaps executive compensation has something to do with why Staples stands head and shoulders above its main competitors in the office supply sector.

"Overall, it is not hard to find companies that have their shareholders' interests at heart. The first place to look for them is in the companies' proxy statements.

"It is there that compensation is clearly defined. If you can't understand how a particular company's compensation is paid out or if it goes against your better judgment, take a pass and don't invest in that company.

"Keep in mind that when you are buying a share of a business you are really buying a piece of the company. If management appears to be taking the lion's share for itself and leaving the shareholders with crumbs, don't buy their shares – there are lots of other companies from which to choose."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.