Long term capital gains is less than the alternative minimum tax. Executive compensation probably consists of a mixture between stock options and company paid expenses (airfare, company car, vacations, travel, nice office equipment, etc).

Maybe the IRS determines that's the market rate for their skills :P

If the majority of CEOs do this, then that is the typical compensation of CEOs. So they get away with it because they all do it.

I believe this only applies to S-corps, in order to prevent abuse of the pass-through taxation S-corps enjoy. IANAA though.