I think the compensation policy Ben & Jerry's had during their earlier days (before being bought by Unilever) should be a model for all corporations:

The most the highest paid person in the company can make, is seven times what the lowest paid employee makes. If the lowest paid guy makes $10.00 per hour ($400.00 per 40 hour week) the most the president, CEO, CFO or whoever can make is $2800.00 per week. If he wants a raise, everybody gets one.