Politicians Wage Increases, How should it be done?

Reading all the news about the big increase the politicians gave themselves in Edmonton, makes me realise there needs to be a different and better way to set politicians wages.
I think there are two problems with what as happened in Edmonton; First of all the amount of the increase is obscene, if the argument is made that these people have not received a proper increase for years. That they are not in line with the private sector, I say too bad have a proper review system in place and do it on a regular basis. Second problem is that they determine their own pay increase, there are not to many of us in this world that get to be both the employer and the employee at the negotiating table.
Suggestions for a better way to set politicians wages; in the Crowsnest Pass the out going council sets the rate for the next council, the only problem with that is it becomes a political versus a practical decision.
In Hinton they had a committee http://cgi.bowesonline.com/pedro.php?id=17&x=story&xid=405726 made up of community members that reviewed their remuneration, would that work? only if the membership of the committee was seen to be totally non political by the public at large.
Whatever process is decided on, it should not be left in the hands of the people that get to make the decision (politicians), it should be done on a regular basis so you don't see obscene increases of 20-30%. And most importantly it needs to be done in a clear, transparent manner.