This is very easy. Paying executives big money is legal. Simple. As the law stands, if your company lets you have it, then that’s that. It’s capitalism, baby. The law does make PLCs disclose to us how much their top people get paid, so we can see their packages (ooh-er Matron).
Just because it’s legal doesn’t mean big pay is ethical, and elsewhere I’ll discuss some contours of legality and ethics in the business world. For what it’s worth, some of the ‘Crime and Punishment 1: Crime’ post highlights that ‘legal’ does not always, in reality, equate to moral; and so all that’s immoral may not also be illegal. (See also this post on a very good business ethics blog)
Ethicists can argue the size of corporate pay. PR people can question the sense of taking big pay in the face of public antipathy, or the point of rejecting it under pressure. Politicians can question whether they want to be aligned with big pay. Business analysts can wonder whether binding shareholder votes will make a difference. Anyone doing studies of happiness can argue about why relative parity increases wellbeing in a society. Football fans can ask whether Tevez, Adebayor, and Yaya Toure deserve to be paid millions upopn millions each year, and how that fits with bankers. Statisticians and journalists can tell us why we don't talk about bankers losing jobs. Everyone can ask whether they value themselves at the rate they earn, and whether they are worth twice as much as the guy below them, or half as much as the guy above. Philosophers and economists can always question the merits of capitalism.
But a legal blog has very little to say on the matter. Unless and until the law tries to make a difference.