The (mis)use of options is not the only problem with current executive compensation schemes. As this article explains, there's the issue of transparency. The SEC's chairman offers a pithy quote:
The rules significantly expanded the disclosures that companies are required to make about compensation for their highest-paid executives. Christopher Cox, SEC chairman, has said that investors "should not need a machete and a pith helmet to go hunting for what the CEO makes".
But it also presents a fact that is capable of shocking even a jaded veteran such as yours truly: CEOs often make as much as ten times as their top lieutenants. Wow. This is just plain nuts.
Kudos to the SEC for finally beginning to address these issues.