Corporate officers are largely compensated based on the performance of the stock. That is, their first duty is to the stakeholders and putting their interests on par with their bosses (the stakeholders). They reduced salaries across the board in the 90's in an effort to shift from a guaranteed comp level to open it up to performanced based pay with a much higher ceiling. None of this is anything you wouldn't know just by reading the news.
What you don't know is that most corporate officers do not get cash bonuses until after all accrued funds are allocated to the business units. That is, they get paid last.
Many CEO's get paid huge bonuses even when the company loses money. Why? Often a company makes projections and predicts they will lose money in the upcoming year. They hire a CEO with a track record (hopefully) of turning those losses around.
Example: Widget Inc. expects to lose $50 million in the coming year. They hire a CEO who reduces that number to $25 million. He has saved them a $25 million dollar loss ergo he gets a big fat check.
Lastly, many CEO's are given targets for the stock price. When I worked at one big DE bank, the CEO kept harping on the need to get the stock to $100. This was a pipe dream as we had been stuck in the $60 range for a few years. In my opinion, he ran out of ideas and realized the best way to get a maximum payday and retire was to merge with a bigger bank. So that's what he did. That's the hole in the system. The CEO's have realized they can get paid and walk away by simply merging. Never mind what's best for the company or the employees or even the shareholders. They run out of ideas and just give up and merge so they can retire.
Disclaimer: Some of the merger madness was inevitable due to the oversaturation of the banking industry but really, some of the much larger mergers were unnecessary and in the long run, a bad idea.