I think you may be missing the point. I don't think the boom in equities escaped Krugman or other observers. I think the point is more that boom or no, boards g

I think you may be missing the point. I don't think the boom in equities escaped Krugman or other observers. I think the point is more that boom or no, boards get to approve comp packages. And when designing a comp package, it is not all that difficult to ensure that the CEO does/does not qualify for gargantuan sums of money on meeting performance targets. Further, taking this step can lead to better alignment with shareholders. For example, one frequently recommended way to improve compensation is to compensate on alpha vs. a peer group and/or index. Clearly, every CEO in the S&P 500 didn't deserve the massive ramp in comp implied by the charts. Bigger picture, just like with any employee, management usually has an idea of the total package value in mind and then backs into how the employee gets there. If the Board starts with an expectation that the CEO should make a gazillion dollars, they can design a package to get there. If the expectation is that the CEO should earn less, they can design a package to do that as well. The question remains why this expectation changed.