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People say that shareholders "own" a public company, but that ownership is much more limited than ownership in the normal sense. In reality shareholders have very little direct input on how the CEO gets paid. The best chance for shareholders to influence CEO incentives would be if an activist investor got involved and made it an issue, but that's fairly rare, and usually only happens in the most egregious cases.

Share loans are a really simple way to align incentives. Execs get shares loaned with interest at market value, and can’t sell faster than the loan repayment schedule of 20% per year after the end of tenure. Some other rules apply like dividends can’t be paid from a negative value loan. Sure, option incentive packages try to approximate this, but they can’t legally capture the downside like a loan can.

Management in many companies are just puppets installed for the purpose of keeping a person or group of persons in control. You'd be surprised at how many companies have management that has the decision making capabilities of a toddlers. And when I say toddler, I mean that in a literal sense. You can take an intelligent toddler and have them make day-to-day decisions that would be BETTER than middle-management.