Of course market forces do that. Shareholders demand a hefty return for their investment. If the board can bring in a CEO who is so good that he can guarantee hefty profits, then he is brought in - even if he makes seven figures. If the board does NOT do that, and end up with a sub-par rate of return, the shareholders dump them and elect a new BoD more willing to do what they demand. Market forces at work. Likewise, if a new undereducated executive becomes CEO of Wal-Mart and draws a salary equal to his workers, and as a result prices climb, then shoppers will bail instantly and head over to Target, where the well-paid (and effective) CEO is keeping prices low. Market forces at work.