I think you are on the right track to be thinking about a carrot and stick approach to the corporations, and not the individuals, to get the corporations to stop paying astronomical sums to individuals. I've watched it happen starting with the corporate raider thing in the late 70's, early 80's. Then it was all that American biz had to become lean and mean and increase productivity to compete with the Japanese. This coincided with the average Joe being newly allowed to buy stock, and without having a broker (day trading was a huge frenzy) with the new computer trading systems. And pension funds getting into stocks and mutual funds being created (and everyone's grandma even getting into the financial action once available only to the wealthy or connected, by switching from savings accounts to the newly available Certificates of Deposit.)

What happened at was a bidding war for the CEO's who could deliver increase in stock value, however they did it. This was driven by the vast increase in the population of shareholders, to include the middle class. They and their mutual fund directors drove it. (Much as we like to joke about Mitt Romney's statement about corporations being people, I suspect this is what he meant.)

Over the years, because of the bidding wars for the CEO's who could deliver, the astronomical pay packages became standard for all CEO's, including the mediocre and the bad.

Reversing the process of how it happened is the key to changing it, I think.

You really can't solve it that easily by the taxation of the individuals or income caps. There are too many tax attorneys ready to find another way to give them the money. (They already invented things like stock options and golden parachutes to make up for salary differences.) You've got to incentivize it, to get shareholders to want and demand far more reasonable pay for the bosses. A punitive tax or other kind of strong disincentive on the corporations themselves if they overpay individuals is thinking along the right lines on this, mho.

This is really is all tied up with the "we're not making stuff" problem, I think. Because what happened when the middle class was brought into the stock market was that everyone started trading stock to make a profit on it when they sold it, that stock itself became the product, no one cared about owning stock long term for dividends any longer. That's when the financialization of the economy really ramped up. It wasn't smart to make stuff and make profit on making stuff, it was smart to increase the value of your stock and pay some guy a lotta money who knew how to do that.

I think it's an impressive and novel idea.  Definitely haven't seen it before.  My worries would be:

1)  It would drive down wages for all workers, not just workers at the top.  Indeed, really big companies could argue that they can save more by cutting the salaries of 10,000 workers in the middle than by cutting salaries at the top.

2)  Clinton tried to discourage companies from overpaying at the top by capping the corporate tax deductibility of those salaries at, I believe, $1 million.  The result?  Base pay and benefits shrank and were replaced by warrants, stock options and other equity incentives.  These turned out to be worth far more than the old cash compensation and it's one of the reasons, besides the Clinton boom, that the ultrawealthy became uber-wealthy.  Your plan could encourage more equity based compensation, which has its benefits and problems.

3)  Companies would respond to this by... not having employees.  We'd move to a contractor economy, something that both of us are familiar with as we have worked freelance.  You can regulate against that, of course.  The IRS already says that if you can tell a person where and when to work that they are, in effect, an employee.  A contractor has certain rights and one of them is to do the contracted work roughly on their own schedules.  But I could see many industries responding to this by saying, "guess what, you're all fired but we'll contract your jobs back to you.  You don't have to follow the employee handbook anymore, but at least you're still a business expense and not a liability."

We don't really want to fill the ranks of CEOs, bankers, and lawyers with clock-punching dead weight.

I don't see why that would happen, Genghis.  Forcing a company to cap the salaries of their top earners only puts them at a competitive disadvantage if they have to compete with other companies who are not doing that.  If we just impose some kind of maximum wages or salary caps, what are the poor CEOs going to do - run away to India or China to make more money?  Please.   And for the few who do ... good riddance.  Despite the hagiographies in the business mags, these cats aren't geniuses.  Every one of them can be replaced.

The CEO-to-bottom employee pay ratio in the US is something like 147 to 1.  In Sweden its 12 to 1; in Japan its 11 to 1.   What do we know that those countries don't?  Nothing.   We are just much more tolerant of antisocial greed, class warfare and racketeering in this country.

We can just impose a 20-to-1 rule, and other restrictions on stock options, bonuses etc. and be done with it.   Top earners can still increase their salaries if they can figure out how to raise the salaries of everyone else in their companies.   But an alternative approach might be to set up a whole host of egalitarian compensation guidelines like that, and then designate companies that are certified as following the guidelines "American Patriotic Teamwork" companies, or something along those lines.   The guidelines could be officially "voluntary" - but there could also be a large variety of tax, regulatory or insurance incentives set aside for companies that follow the guidelines.

That would probably do the job with most boards of directors.  I daresay there would be a whole host of hard-working, smart and non-greedy people who who would be proud to put their talents to work in such companies.  We could take care of some of the others via shaming, and the threat of further legislation.  After most parts of the corporate community got on board , they would constitute a lobby that would put increasing pressure on the outliers.

Turn the system upside-down.  In addition to raising the minimum wage, lower the maximum wage.  Make the salaries for jobs be based on physical effort, rather than higher position (or higher brain function.)  In other words, pay fry cooks and corporate mail-room trainees millions of dollars a year and CEOs the minimum wage.  People would earn the most when they start out as go-fers and increasingly less as they become more successful.  And you ensure they can't stay too long at the bottom by making it mandatory that bottom entry levels jobs can only be held onto for 2 years.  Make the real status in society become how little you make, not how much.  The incentive to work hard and become successful then becomes more about earning prestige and power than about money.  Doing this allows the most money to be in the hands of the very young, who, as we all know, are the biggest, most eager consumers, thus stimulating the economy.  But it also demands that people become more aware of personal financial planning, knowing that they will be earning less and less in the future, they need to make sure they plan ahead, save and learn to invest their money wisely.  

Conservatives already hit Progressives with phony charges like: "They want to take all the money from the rich" and 'They believe in Socialist Economic Re-distribution',  so, let's go all the way and really give them something to scream about.   ;-)