Should CEO pay restrictions spread to all corporations?

"The righteous populist anger is competing against the awesome political-economic power of Wall Street," says lead author Robert Weissman.

To him, managers of hedge funds won the "most egregious" tax break – the ability to claim their income as capital gains and pay only 15 percent in federal taxes. Considering the high incomes many got before stock prices tanked, these managers would otherwise pay regular income-tax rates at least twice as high. "Completely irrational," says Mr. Weissman of the tax break.

Last year, New York Democratic Senator Charles Schumer, highly dependent on Wall Street for campaign contributions, did not support a measure closing the hedge-fund tax loophole. Yet, argues Anderson, it was "a no brainer."

To "rob" banks, as Friedrichs regards the CEO pay process, executives walk into a corporate boardroom and secure from the board's compensation committee unjustified compensation packages of millions, tens of millions, and sometimes hundreds of millions of dollars. This process, says Friedrichs, "pays much better" for CEOs than robbery does for the crook with a gun. These compensation committees, appointed by the CEOs, are composed of cronies, paid consultants, and even relatives, says the criminologist. By law, some corporate directors must be "independent."

But an academic study of 2008 looking at a small subset of these so-called independent directors who were formerly Wall Street stock analysts describes them as "cheerleaders." One author of the study, Lauren Cohen of the Harvard Business School, says they are "clearly not independent," not adding objectivity to their boards.

Another academic, Harvard Law School's Lucian Bebchuk, suspects public outrage makes the prospects of reform "better than they have been for a long time." His reform preference would be "rules and regulations that strengthen shareholder rights and make boards more accountable to shareholders."

It used to be that CEO pay was a drop in the bucket compared with the size of big companies – "just" 42 times the pay of ordinary workers in 1980. But Professor Bebchuk found that during the period 2001 to 2003 the earnings of the top five executives at a set of large firms amounted to nearly 10 percent of corporate earnings. That is significant to shareholders.

Anderson also takes a shot at the argument that CEOs are irreplaceable management geniuses, deserving fat bonuses.

"I can't believe," she says, there aren't talented people who have "a spirit of shared sacrifice" and seek long-term gains for their companies, rather than those "fixated on how many zeroes there are in their paychecks."

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