Former General Motors chairman and CEO Richard Wagoner was entitled to receive $23 million in retirement benefits as recently as last year, but after driving the company into bankruptcy and costing taxpayers billions, it's been decided that $23 million was too much.

Now Wagoner will be getting just $8.6 million over the first five years of his retirement, a benefits cut the company said is consistent with what other workers are taking.

But wait a minute: How many other GM workers are getting $8.6 million? Not many, but I guess the argument GM is making is that it's consistent on a percentage basis. But how many of GM's workers were as directly responsible for the company's downfall as Mr. Wagoner?

Richard Wagoner's retirement package has gone from hilariously excessive to ridiculously excessive. In that sense, there's no principled distinction between Wagoner taking $23 million and taking $8.6 million. If he had any character or desire to salvage what's left of his legacy -- and prevent his children from having to bear the name of an infamous villain -- he would have turned down all retirement benefits and directed that they be used for the benefit of the company's lower-level workers.

Then, Mr. Wagoner could say that the price of his character was at least $8.6 million. But for now, this retirement package will do nothing but buy him some nice foreign cars and cement his place in the annals of infamous executives.

So far the U.S. has committed $12.8 trillion to bailing out Wall Street. Does this mean that Wall Street CEOs made mistakes? Apparently not. Because if it did, the Wall Streeters who cost taxpayers all that loot would be out of their jobs.

A few have moved on -- consider Merrill Lynch's former CEO Stan O'Neal, who, after leaving the investment bank with a then-record $2.24 billion loss, received a "kick in the rear" amounting to a $161 million retirement package. (O'Neal is just one of the Harvard MBAs whose destruction of the global economy is prompting some navel gazing at HBS.)

Most, though, are still at their desks, gamely calling the shots. Yesterday, Treasury Secretary Tim Geithner suggested it could be time for that to change.

There could be an opportunity to tweak the way we pay CEOs of big public companies. I hope this doesn't sound too harsh. But when you consider that the average 2008 compensation for the 10 highest paid public company CEOs was $40.7 million, while their companies lost half, or $30 billion, worth of their stock market value -- I wonder whether some change may be in order.

The year 2008 put a big exclamation mark on, hopefully, the end of an eight-year sentence of stabbing common shareholders in the back. Of the 10 highest paid CEOs, here are the four who destroyed the most stock market value while getting well above average pay. The companies are listed in descending order of the percentage destruction in stock market value, along with the CEO's 2008 compensation and loss in stock market capitalization:

• Citigroup (NYSE: C) paid CEO Vikram Pandit $38.2 million while its stock fell 78% destroying $124 billion in stock market value
• Motorola (NYSE: MOT) CEO Sanjay Jha made $104 million while overseeing a 75% stock plunge which wiped out $27.9 billion in stock market value

Another day, another item about excessive compensation. While American International Group (NYSE: AIG) pays out a ton of money to its own employees, the Hershey (NYSE: HSY) board has seen fit to bestow a rich compensation package to CEO David J. West.

Oh well, what can you do, I suppose. I always hate reading these reports. They always get under my skin. If you're a shareholder of Hershey, you're not doing that great right now. The stock will probably do well over the long term, but in the meantime, your shares are down over the last several years.

Reading the sports section, I'm marveling at how the Oakland Athletics have managed to stay in contention year after year in spite of a low payroll and the fact that every future star that they develop ends up leaving for a bigger contract with a competitor.

And then it dawned on me: when was the last time you saw a CEO at a major company leave for a higher-paying job somewhere else? I can remember talk that Meg Whitman might leave eBay (NASDAQ: EBAY) for Disney (NYSE: DIS) but musical chairs never seems to happen among 8-figure CEOs.

This absence of competition and free agency, I believe, helps expose what a joke executive compensation is. The only reason to pay a CEO $50 million is to prevent him from going elsewhere for more money, right? I mean, if the most he could make at at another company is $15 million, then why would he turn down an offer of $25 million? The fact that CEOs at top companies never go somewhere else for more money makes me think a lot of compensation committees are leaving a lot of money on the table. If you're the CEO of a billion dollar company, you pretty much stay there until you retire to spend more time with your family after you screw things up royally.

Here's one way to look at executive compensation: look at how much a CEO earns and then estimate how much he could earn doing something else. The difference provides an estimate of the margin by which he's overpaid and, given that S&P 500 CEOs never seem to leave leave for higher-paying jobs, you have to think that margin is pretty wide.

A survey by Corporate Library indicates that pay for CEOs running S&P 500 companies grew 23% in the last year to a median level of $8.8 million. That's 1.64 times faster than the 14% increase in the S&P 500 average from October 6, 2006 to October 25, 2007.

Should you care? If you're a shareholder of a company whose CEO pay is growing faster than its shareholder value, you have two choices: sell the stock or try to organize your fellow shareholders and lobby the board for a CEO who will increase shareholder value faster.

There's no way you'll realistically be able to get the company to limit increases in its CEO pay to a level below the growth in shareholder value. Instead I think it would make sense to look at the ratio between CEO pay and increases in shareholder value.

While there are many idealistic people in this world, few actually do things to implement their opinions and ideas in a pragmatic way. John Montgomery, the founder and CEO of Bridgeway Funds is certainly not one of these people. From reading an excellent Barron's article (subscription required), I've learned more about compassion and philanthropy in an investing leader than I have from any other article this month. In addition to learning about compassion, I learned a very interesting remedy to emotional inefficiency that exists in nearly every investor.

Every year, Montgomery's company gives half of its profits to charity. While many companies do have "philanthropy" departments, very few give significant amounts of money compared to the company's profits. I've also found that many companies simply do this for tax advantages -- this is not the case with Bridgeway. Each of the company's 24 employees could select a charity to receive at least $20,000.

Montgomery also limits his compensation to seven-times that of his lowest employee. For those not familiar with the disgusting executive pay situation in this country, the average CEO makes 531 times the pay of his lowest employee. While many, including myself, just complain about this fact, Montgomery is actually doing something about it: "Executive compensation is way out of whack in this country, so we have our own system to reduce any possible animosity in the firm."

One of the things that intrigues me about the recent Wall Street bonus payments is that top traders make twice what their CEOs get.

The reason for this is that the CEO and the trader participate in different labor markets characterized by different next-best-alternatives and different levels of performance measurement complexity. Huh? While the CEO of an investment bank's next best alternative job (at least at The Goldman Sachs Group (NYSE:GS)) is to give up money and go for the power and prestige of a government post (e.g., Treasury Secretary), the top trader's next best alternative is to leave the bank and start up a hedge fund. Moreover, a CEO's job is complex and difficult to measure whereas a trader's job is enormously stressful and relatively simple to measure.

At Goldman, for example, CEO Lloyd Blankfein is slated to take home $50 million whereas some traders, such as Morgan Sze, a head trader in Goldman's principal strategies group based in Hong Kong, are rumored to be receiving $100 million. Traders such as Sze are prone to leave to start their own hedge funds where the average of the top 100 made roughly three-and-a-half times his bonus -- or $363 million in 2005. For example, Eric Mindich, a top Goldman trader, left Goldman in November 2004 to start Eton Park Capital Management, with $3 billion under management.

In a move sure to take cost savings to a newly symbolic level, Yahoo! said today that Terry Semel's salary would be reduced to $1 each year throughout 2008, just like the top management at Google.

[Aside: as someone who's often been responsible for payroll, I've always wondered how these checks were processed; is it paid all at once or split up into bi-monthly amounts of four cents each? And do they withhold FICA?]

In return, Semel received 6 million stock options at an exercise price of $31.59 per share, as well as the opportunity to receive up to 1 million additional stock options each year. Semel has made $429 million in stock rewards, in addition to his $600,000 salary -- so please don't start sending him your leftover cans of garbanzo beans.