The CEO-pay market isn't the same as a generic market though. The influence of the principal-agent problem is obvious, where 'management' is motivated to increase its own remuneration over time, and rarely drop it. (Yes, external directors are involved in remuneration but they're still not as motivated as the investors to keep costs in check.)

If only stock investors set the demand for management against the available supply and management was not involved (and at times, the price was allowed to drop significantly), it'd be more like a normal market.

http://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem