Great work as always by Elle Griffin. CEOs make the bulk of their money in the form of stock options and similar instruments. As I discussed here:

lianeon.org/p/the-futur…

"The problem is that the stock market can be influenced by variables, such as interest rates and other market conditions, that are outside executives’ control. When the stock market is rising (and it generally is) it rewards both good performance and subpar performance. Thus, in a rising market, cashing in options is likely to yield a windfall, even for companies that actually underperformed.”

We can solve this in two ways. 1) As i mention in the article, we can use indexes of peer performers are a baseline of comparison instead. Or, 2) we can adopt a cash flow tax that is equal or higher than the income tax rate, to encourage CEOs to talk their income as salaries like their employees. (I have an article on this coming out in the next few weeks).

Either path, or both, would go a long way toward improve the role of merit in compensation.