Yep, my understanding is that cronyism between the executive and the board is a huge issue driving CEO pay. (Boards can also just be out to lunch.)
One way to fix this is to make corporate takeovers easier. This sort of cronyism ends up being a con on the shareholders (and the con is especially easy to pull off if the "shareholders" are passive index funds that don't pay much attention to their holdings).
By removing legal protection on corporate raiding, the board+CEO have to worry about activist investors who ask inconvenient questions like "why are you paying yourself $30M a year instead of giving shareholders a dividend?"
One way to fix this is to make corporate takeovers easier. This sort of cronyism ends up being a con on the shareholders (and the con is especially easy to pull off if the "shareholders" are passive index funds that don't pay much attention to their holdings).
By removing legal protection on corporate raiding, the board+CEO have to worry about activist investors who ask inconvenient questions like "why are you paying yourself $30M a year instead of giving shareholders a dividend?"
https://www.overcomingbias.com/2010/01/enable-raiders.html