I hear you and agree with you in principle. CEO compensation SHOULD be subject to a proxy fight. Unfortunately, due to the amount of shares that the board of directors owns, the board
usually (not always) votes their shares in favor of whatever exhoritant scheme the CEO and the other executives cook up. The majority of BOD members are appointed (yeah I know subject to approval by shareholders) by CEOs and other executives often at excessive compensation rates relative to the value of the service they perform. Meanwhile the rank and file employee gets a 2% raise.
It's a vicious cycle and a very complicated issue. I don't know what the government can do about this except aggressively police any public corporation who violates IRS, DOL, FASB, etc standards. Also, negative publicity by private watchdog groups would be of benefit.