I would generally agree, but again I know no specifics so can't comment specifically. Well, the BOD are the only people who could set the pay... Who else would do it? However, I do agree that there are serious concerns about the relationships and conflicts of interests on these boards. Boards are made up of CEO's who have a personal reason to elevate general CEO pay. I would like to see some regulations here, I'm just not sure exactly what they would or should encompass.
One problem is that the Boards do not do their duties anymore. They are supposed to watch the executives and make sure the best interests of the owners are protected. They should regulate executive salaries and bonuses and make it commensurate with success and fairly distributed among the entire workforce. As it seems to work now, the CEO's hand-pick their boards who rubber stamp everything, including huge pay packages for the Execs with golden parachutes. Big companies are mostly held by thousands small shareholders who aren't really represented on the Boards. The checks and balances are screwed up, allowing ENRON-type abuses of power and privilege. Once executives reach the Valhalla of VP status they really can't lose financially. If the company loses money, workers get laid off but CEO pay doesn't go down. If the company fails and the Exec is fired, he walks with millions in compensation.
The BOD is not appointed by the CEO. It's the other way around. The shareholders own the company. The shareholders choose the members of the BOD (by a vote). The BOD hires and fires and the CEO, not the other way around. If the CEO ain't making the BOD happy, he is gone. If the BOD ain't making the shareholders happy, they are gone.
Oh, if you want to learn some good stuff about how outrageous CEO salaries are, look up Warren Buffet's views. He's one of the two richest men on the planet (he and Bill Gates go back-and-forth, and the two of them are very good friends). Buffet is considered by most to be the best CEO in United States, and among one of the greatest CEOs in American history. And he is heavily against outrageous salaries paid to CEOs.
Thats the way it is supposed to work, but it doesn't. The shareholders are scattered and mostly have tiny holdings and have practically no influence at all. The executives make all the decisions and the shareholders get to check two boxes--approve the board or not approve the board. The Boards are NOT doing their jobs, especially if they dismiss a CEO and let him take millions with him in severance.
