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Well, this is primary mechanism in play. Board members are elected, but I'm sympathetic to the idea democracy doesn't really work. Principal-agent problems do happen. Many companies do have stock ownership requirements for board membership, but I guess the financial consequences of poor choices here could be cancelled out by your executive price-fixing conspiracy.
Fortunately, it's not the only mechanism: you can just choose not to invest in companies that you think overpay their executives. If you think that leadership doesn't really matter/extra CEO pay doesn't get you much better CEOs, that's profit just sitting on the table, and companies that don't do that will do better, all else equal. This information is publicly available, nothing's stopping you or anyone who agrees with you from creating a 'low CEO to worker pay ratio' fund. This doesn't instantly solve the problem, but it does mean it's not your problem. It's the shareholders who are getting cheated here, not the general public or the employees who, after all, have not been deceived: they were offered a certain product/wage for the money/work and accepted it. It's only the board's betrayal of their fiduciary duty to the shareholders that's dishonest.
Not totally clear to me why this is the case, but I don't think it's strong evidence of corruption. Maybe they were underpaying them before, or maybe something about the corporate landscape has changed that makes leadership that much more important, or suitable applicants have become that much more rare. The increase alone is insufficient to demonstrate there's a problem.
If this does happen, I think it'll result in massively worse performance. There's some leeway for inefficiency in successful companies, but enough to divert 10%+ of revenue into an empty pit? Either the executive really is that great (which maybe isn't impossible, but most certainly aren't) or they'll get outcompeted by companies that don't do this.
The USSR indeed had infamously dysfunctional incentive structures. His treatment was not even particularly bad by their standards. That's really not an argument for adopting them.
That said: not like any other nation would have paid out that kind of money for equivalent actions. A medal would have been entirely appropriate; hell, he'd have been a far better candidate for the Nobel Peace Prize than most of its recipients. (And he did in fact receive various lower profile rewards from some Western organizations.) But a cash prize comparable to the amount of value he preserved? No way. The Soviets did spend an enormous amount of money on nuclear launch detection (the fact it didn't work notwithstanding), but offering huge rewards for correct judgements in these situations would provide the wrong incentive: why would you ever say the detection was genuine? Either it's a false alarm and you get the award, or you've got half an hour to live and it's not going to matter to you either way.
(And there's a more generally applicable takeaway: there's a difference between fulfilling a prior agreement and dolling out rewards case-by-case after the fact. The latter can be worth doing, but the former is obviously far more reliable, and reliability is the most important thing in leadership.)
Well, I can't, because I'm not a finance genius who has devoted my life to picking stocks. My money is mostly in simple index funds, because (a) that's what everyone assured me was the smart thing to do and (b) those are simple and convenient for me to use as a regular person. My company 401k plan never offered me a "basically the S&P 500, but avoid stocks that overpay their executives" fund. Most other normal stockholders are in the same situation as me. I don't even get a chance to vote on proxy votes, since my share votes are handled by the index fund managers. And even when I did own individual stocks in the past, and I got a proxy vote as a regular stock holder, my vote was so small (a few shares out of billions at a blue chip company) that it didn't seem worthwhile to even mail it in. I had less power to influence them as a stockholder than I do to influence the US government as a voter, and that's a pretty low bar.
And most other players can't do this sort of thing either. Rich people might have their money tied up in stock for the company they worked for. Finance managers have to convince the rich people they work for that they're doing a safe, normal strategy. Hedge funds have to follow rules that mitigate risk for their institution. And most people just aren't interested in this sort of thing.
Ok, in principle there's room for some young Warren Buffet type to make his name by finding these companies, shorting them, and outperforming the market. But only to the extent that their excess compensation takes away from every other factor going on, and his efforts to short the stock would be countered by everyone else shovelling money into it. As long as the executives keep it below a few percent, it would be hard to notice.
But think about how far this has gone. It's no longer "the executives deserve this much money because it's what's best for the company." It's "they can pocket hundreds of millions without hurting the company in a way that anyone steps in to stop them." You could make the same argument for how a retail cashier could get away with stealing money out of the till, or how a middle manager could get away with embezzling from the accounting department, but for them it's illegal and there are protections in place to stop that sort of thing.
All of this to say- the market is not some omniscient, perfect entity. It's mostly efficient, but there are still plenty of efficiencies. I think there's a tendency among shape-rotator type people to assume that it's perfectly efficient because that makes for a much more elegant argument, but the reality is a lot more messy.
Also this:
I would argue that the executives, especially the CEOs, are being disengenuous here. They're not just some shmuck working behind the scenes, they act as the public face of the company, for both its employees and the general public. Their personal life reflects on the company just like a politician's personal life reflects on his country. When the CEO tries to make himself seem like a moral paragon when he's obviously just there to grab as much cash out of the company as he can get away with, that's going to demoralize every single employee and tank their performance far beyond the actual cash impact of his salary.
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