In search of corporate boards with chutzpah

As I think about the recent bailout and the discussions about curbing CEO compensation (see here, for example)--and as I think about AIG's recent corporate retreat (here)--I have to wonder exactly why corporate boards (and C-level officers) are so darn concerned about making sure that (1) their CEOs get paid the "going rate" for top executives and (2) rats don't abandon sinking ships (i.e., paying all sorts of retention bonuses and perks to people who might not stay on if their pampering suddenly ended). 

Is it really true that good companies won't attract and retain talented people unless they provide obscenely fat paychecks?  Is it also true that no one working at a company that's going under will stay unless he or she is bribed with retention pay?  Or are corporate boards just afraid to test the waters by paying normal amounts (OK, high amounts, but within some bounds of reason) to C-level officers, and by letting some of their employees abandon ship?

I know at least one CEO who scoffs at the behavior of some public companies.  He actually asked his board to reduce his annual salary so that he could work slightly fewer hours and spend more time with his family.  As he explained, he didn't think it was fair to reduce his hours and still earn the same amount as before.  After considering his request, the board acquiesced, and everyone involved was happy with the result.

I have a feeling that part of the problem is due to boards' tendency to want to replicate themselves when bringing on new board members.  Maybe it's sour grapes on my part, but I've interviewed with some headhunters for positions on the boards of a few public companies and, so far, I've had zero nibbles.  The headhunters tell me that the boards are looking for people with board experience, but they're not talking about my experiences on non-profit boards.  They want people who have served on public boards already, not people who only write about corporate governance and corporate ethics.  That rules me out. 

Admittedly, I haven't been on the board of any company that's hired an executive with a huge compensation package or a golden parachute worth millions of dollars, and I've not been on a board that rewards executives more for short-term performance than long-term vision.  Maybe if I had, I'd have gotten the experience that would get me a position on a public company's board.  But is that the kind of experience that boards should want?

Maybe it's time for boards to think outside the box.  There are a lot of academics who think about issues of board behavior, and it might behoove some public companies (especially now) to consider them, if not as board members, then as people who could prod the boards into thinking more creatively about compensation.  Based on today's ecoonomy, boards should be thinking seriously about making some changes.