If you start spending company time devising instead some new computer software, you will be fired. That is the difference with faculty: they themselves set the agendum; it is not a part of the contract, whereas in industry it is.
Management compensation is an instance of contracts, the normative aspects of which are very difficult and only currently being developed. (Papers in finance and case studies a la Harvard --- including the one you cited earlier --- tend to be empirical, telling us, with variable success, what's out there and not what should be there.) That is the essential point you miss entirely: people did not ignore the issue of CEO compensation, this is where the state of the art is; the boards are doing the best they can with limited knowledge and resources, just like the rest. You could not have known that: observing the CEOs while growing up does not help to advance, and probably distorts, one's knowledge of management. You can watch cars on a highway all your life and not get a clue about engineering. If you want to read on compensation, read up on contracts (the work of Lazear is probably more along the lines of your interest, but he too is rather soft). By that I mean normative aspects: the structure of the opitmal contract under which efficiency and risk-sharing are best, under conditions of asymmetric information that lead to moral hazard and adverse selection (you cannot understand options as a conpensation device without the latter, for instance).
Given that this is an academic question, as you yourself have construed, perhaps you should address it to true academics: having been uncovered by you as a mere cheerleader for the CEOs, I do not feel qualified to be useful any further.
Your management, lacking expertise, has no opinion about whether a particular alloy should be held at 550 degrees for an hour to make it less brittle.
My management almost always has an opinion about what I'm doing, usually in the form of the technical necessity of what I'm doing as it relates to cost/profit and marketability - or what someone else is doing in the competative marketplace. Depending on the type of hat I'm wearing, I'm also asked to provide assessments on other's performance and on the technical abilities and compensation of new hires. I've also been involved in decisions on reorganization (creating a new division by dividing an existing one). In my experience, there are a lot of people at the table providing opinions, and although we all work for "the man" the discussions are almost always shaped by what's best for the company and the employees. I agree that I'm doing what the management hired me to do, whether they like my opinion or not. I may be wrong, but I feel that professors face similar pressures in the research area concerning the marketability of their research and demand for their opinions.
Most of the research done in industry --- and that includes fields such as biomedics --- is applied.
This is true. It is also often true in academic research. It is exceedingly difficult to find altruistic benefactors in industry or academic research. Most research done is government or corporate funded these days. In my area, engineering, it is an applied science, so it would be difficult for me to refute "new fundamental" knowledge with my background. However, there are a number of professional societies/groups which are pushing the areas of information theory and communications theory forward outside of, though not isolated from, the academic institutions.
We may be an arrogant bunch, but engineers and computer scientists see their work as benefiting the society at large. If I, or my employer, can profit by my work - good news, pays the bills, keeps the family fed. Many of us write and design, without the needed protections, to further the body of knowlege on our own time and with our own money. Even the university plays in the economics of research, especially in the applied sciences.
Unfortunately, morality battles cannot be won with courts....we really do not know what optimal contract looks like even in very simple circumstances. Moreover, we do not fully know what constitutes performance --- in fact, I am not sure whether the measure of performance exists....You could not have known that: observing the CEOs while growing up does not help to advance, and probably distorts, one's knowledge of management.
It may be a stretch to put these together, but I want to agree and disagree with this train of thought. It is impossible to legislate, judiciate, or contract moral behaviour. Growing up, knowing the families that worked for my father, and eventually one becoming the President/CEO of the company, I was in a poor position to judge their managment skills. But we knew them in a way that the board members did not. Every year, we gathered together for clambakes, picnics, social events, and some we knew also through religious activities and events. We knew about their values. And I believe that when my father recommended one of his own for a promotion he was offered, it carried a lot of weight. He knew Jeffry Skilling and dealt with Enron regularly. He's not prone to showing his emotions, but the fact that Anderson was destroyed and Skilling is still not in jail, is one topic that can get a rise out of him.
Not all boards and CEO/CFOs are crooks. Not all the mistakes were driven by malice, but many were made by turning a blind eye to the man behind the curtain while the growth and profits were high.
On the topic of this thread, the 1998 and 2000 H1B bills were written with poor information, provided within an inaccurate context, and propped up with political contributions. Yes, there are economic benefits for driving done the cost of labor and management. Certainly organizations can drive down the costs of high demand/low supply technical skills (and talented experienced engineers/scientists) by broadening the pool of talent. I still believe that the talented CEO's paid close to 500 times what their talented/skilled labor force is paid is out of wack. I find it hard to understand why economics would support forcing down salaries of talented technology personnel while justifying huge increases in compensation for the CEO over the last two decades. If talent and performance can't be measured (especially in management), how can their compensation be justified?
Allow me to go back and ask how the current H1B law is justified given the following:
"Last year, the high technology industry announced layoffs of over 520,000 people. During this same period, the INS reported receiving applications for more than 324,000 temporary H1-B visas." - ICAA
I would like to see the numbers weeded out to identify where the shortfalls really are, and where employers are taking advantage of the system. Then a better law to help employers who truly can't find needed skills in the American marketplace and jail for the employers scamming the system.
"The unemployment rate for all engineers increased from 3.6 percent in the first quarter of 2002 to 4.0 percent in the second quarter, data from the U.S. Department of Labor, Bureau of Labor Statistics reveals. The rate for electrical and electronics engineers (EEs) rose from 4.1 percent to 4.8. The rate for computer scientists, which includes systems analysts, jumped from 4.8 to 5.3 percent. Overall unemployment fell from 5.9 to 5.4 percent."(1)