The chief executive officers of America's largest companies are grossly overpaid fat cats, Vanguard founder John Bogle told Dallas Morning News in a recent interview.

Although compensation committees and independent consultants are supposed to do due diligence on determining executive pay, executives stack the committees with cronies and hire consultants who aim to stay in executives' good graces, and continue to win their business, by recommending generous raises, Bogle said. As a result of this warped system, executives will continue to be overpaid.

"No chief executive worth his salt is going to put the academics, the ministers or the doctors on the compensation committee," Bogle said. "He's going to put on the CEOs on the board who understand what the game is all about.

"No consulting firm, as far as I know, has ever stayed in business by recommending that CEOs get less money," Bogle continued. "Things are so out of whack that the only way to redress the balance is for CEOs to get 50% less than they're getting now. That's not going to happen. We're lost in an ethical morass here."

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