Ostensibly CEO compensation is so high in order to incentivize them to make the company perform well, this job that apparently only these rare individuals are uniquely talented to do. If the CEO suffered pay cuts or lost their job when times turned bad for the company -- the way it does for those being laid off -- then wouldn't that be a pretty strong incentive to keep the ship running well?
Instead, it seems CEOs just get to keep the carrot, while the fallout from their poor decisions falls on everyone else. What kind of performance incentive is that?