companies. The institution failed, regardless of who caused it. [Guilty Party #3, the Government and Intelligence Services]

6e The forcing function. Through the 1970s and most of the 1980s, executive pay was predominantly cash salary, with modest bonuses and limited equity components. CEO-to-worker pay ratios in that period ran in the range of 20-to-1 to 40-to-1, comparable to ratios in other developed economies and consistent with the historical American norm. [But we forget, sometimes, remember?]

The shift was engineered. Section 162(m) of the Internal Revenue Code, added by the Omnibus Budget Reconciliation Act of 1993, capped the corporate tax deductibility of executive compensation at one million dollars per executive — unless the compensation above that threshold was classified as performance-based. Stock options were specifically defined as performance-based and therefore