I've heard from a lot of people that back in the 1950s, executives used to think more about the long-term health of their businesses, rather than what would happen to their company's stock price in the next couple months. While it's hard to quantitatively measure things of that kind, it's certainly the case that average CEO tenure has declined dramatically. In the 1950s, the average CEO stayed at his job for 10 years. Now it's under 3 years, and I wouldn't be surprised if shorter CEO tenures are tied to shorter-term thinking.
Another big difference between the 1950s and today is that top marginal tax rates have fallen dramatically. From 1951 until 1963, the top marginal tax rate was above 90%. Now it's 35%. So if you were trying to accumulate wealth in the 1950s, it would've been sensible to look after the long-term health of your business and rely on a steady income, year after year, in the lower brackets. Nowadays, you don't have to do that. You just have to juke up the stock price without tending to the fundamental health of the corporation you're running, earn an insane paycheck for a short period of time, and the low marginal tax rates will allow you to keep two thirds of the money you make. So CEO pay runs to 800+ times the minimum wage rather than the mere 50 multiple that prevailed in 1965, and the people at the top are ready to take the money and run.
I'm actually with the Laffer Curve people part of the way here -- you collect less in taxes when you run the top bracket above 90%, because people stop pushing for big salaries when they can't keep their money. But that's just fine with me. If restricting CEO pay just leaves more money in the till for workers to take home, I'm happy enough to run the downward redistribution of wealth through the private sector rather than through government-run social welfare programs. It's actually fine to be on the far slope of the Laffer curve, because that's where money flows down to people in the lower brackets.
