Originally Posted by Fermi paradox
CEO compensation is currently trending away from Golden Parachutes and fixed compensation and more toward performance based reward formulas, which will correct the relatively recent mistakes over a reasonable period of time. That was a glitch, and the market is correcting it. It has had more of a psychological effect than any real effect on compensation downstream.
I think I take exception to each of these statements.

First, do you have any citations for the first? I have one that tends to refute it: Executive Paywatch (Yeah, it's the AFL-CIO, and they have a vested interest. Still, it appears accurate and sourced.); and Executive Pay - PBS.

Second, the market did nothing to correct it, except in reaction to government pressure and the threat of inquiries. SEC Votes to Propose Changes to Dis...ecutive Compensation and Related Matters; New SEC Rules (and PBS)

Finally, although the psychological effect is undeniable, it is not at all accurate to say that it hasn't had any real effect on compensation downstream. Consider, that $1 million in compensation for the CEO eliminates $1000 for 1000 employees. It's got to come from somewhere, profit distribution is a zero-sum game. Multiply that by Billions in executive compensation and you get the greatest income disparity in the developed world. PBS - citations; Economic Policy Institute

A well reasoned argument is like a diamond: impervious to corruption and crystal clear - and infinitely rarer.

Here, as elsewhere, people are outraged at what feels like a rigged game -- an economy that won't respond, a democracy that won't listen, and a financial sector that holds all the cards. - Robert Reich