I listen to Thom Hartmann's radio show pretty regularly. Last week (and probably other occasions) he proposed that corporate executives should NOT be compensated with stock, because it causes them to think like shareholders, i.e. gamblers. The tax rules were changed in the early eighties in a way that encourages stock-based compensation, and this needs to be reversed. I think this is a bit short-sighted.
The way stock options and restricted stock awards are granted now, execs are allowed to sell them off relatively quickly and turn a fast multi-million dollar profit. Sure the SEC has rules preventing insider trading, rules which determine when insiders are allowed to initiate transactions, but clearly they can make short term profits. The problem here is that the exec has an incentive to pump up the stock price in the near term, even if it comes at the expense of the company's long-term health.
I think that instead of doing away with stock-based compensation for execs altogether, require them to be time-delayed by a sufficient window of time that forces the incentive to be on the company's five or ten year health. No more flipping stock options like rich jerks (used to?) flip houses. You want your options to be worth millions, make sure your company is in great shape 5 years out.