Marissa Mayer will pocket $186 million when Verizon completes its acquisition of Yahoo, epitomizing corporate America’s affinity for paying CEOs for luck.

Yahoo’s core business stagnated under her leadership. However, she inherited Yahoo’s investment in Alibaba, China’s e-commerce colossus. The increasing value of Alibaba BABA, -0.23% caused Yahoo stock US:YHOO to double over her five-year tenure. Hence she deserves $186 million, because CEOs get paid for performance.

The average Fortune 500 CEO makes over $20 million a year. This is roughly 300 times what the average employee makes — and this excludes the CEO’s gains on stock options. Add these in and the ratio jumps to 500-to-1.

Globalization isn’t the cause. In Japan, the ratio of CEO pay to that of the average worker is 16 to 1.

Nor is this the result of market forces. Companies don’t bid against each other for CEOs. To be successful, a CEO needs to understand and manage a single company in a single industry. Such knowledge and skills are seldom portable. That is why 75% of Fortune 500 CEOs are promoted from within. A CEO jumping from one large company to another happens about once a year on average. And when CEOs jump, they usually fail.

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Instead of a market, boards and compensation consultants have created a Rube Goldberg device that I label the CEO Pay Machine. This bases CEO pay on what other CEOs (their so-called peers) are paid and on whether the CEO surpasses targets negotiated with the board. This produces an annual round of leapfrog. After negotiating easy bonus targets, a CEO vaults over highly paid peers, thereby raising the peer-group base for the next jumper. Pay for American CEOs is now as market and performance-driven as was pay for Soviet commissars in the Brezhnev era.

Adjusting for inflation, CEO pay has risen 10-fold since 1980. Suppose companies retained consultants to advise them on insurance. If the cost of insurance rose 10-fold with no change in coverage, some directors would ask questions. If directors would question the consultant-constructed CEO Pay Machine, they would realize it rests on a bed of quicksand.

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Not only is CEO pay not market-based, but it also misdirects these executives. Numerous studies have show that large financial incentives at the CEO level harm performance by narrowing vision, limiting creativity and innovation, and focusing exclusively on short-term results.

The CEO Pay Machine neither effectively measures nor rewards executive performance. A large number of studies have found either no correlation between CEO pay and long-term company performance or that the more the CEO is paid, the worse the shareholders do.

It is incongruous that modern business corporations that pride themselves on their use of big data and rigorously quantifying, analyzing and testing everything then pay their CEOs hundreds of millions based upon Voodoo.

“ The short-term focus that the CEO Pay Machine encourages does even more damage by discouraging sound investments. Rather than investing, companies buy back their own stock. ”

The millions wasted on executive pay is a small fraction of the costs the CEO Pay Machine imposes on companies. The effects on employee morale are much more harmful. When the boss makes 300 times what you do, it is difficult to swallow his bombast that “employees [or associates, or team members] are our most important assets”.

The short-term focus that the CEO Pay Machine encourages does even more damage by discouraging sound investments. Rather than investing, companies buy back their own stock, thus keeping the price high for when executives cash in their options. From 2005 to 2014, stock buybacks by S&P 500 companies totaled $3.7 trillion. This equaled over half of their total net income and exceeded dividends to shareholders by 50%.

This is $3.7 trillion that could have been invested in American industry. Instead the companies cut R&D and investment in plant and equipment by half. This is eating the seed corn, but if you get paid $20 million a year, it may be tasty.

I was a CEO for 14 years and have served on over a dozen corporate boards. I have noted, not to my surprise, that corporate directors tend to act in their self-interest. Therefore more outrage, say-on-pay votes, SEC-mandated disclosures, congressional hearings and newspaper editorials won’t change the behavior of corporate boards. We have witnessed 35 years of outrage, yet skyrocketing pay remains in their self-interest.

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Only a blunt instrument will change directors’ behavior — and my blunt instrument is a luxury tax. If a luxury tax is good enough for Major League Baseball, it’s good enough for corporate America. For every dollar over $6 million that a company pays any executive, it should pay a dollar in a luxury or penalty tax. This rule would cover all forms of compensation, including gains on stock options and golden parachutes.

There is no magic to the $6 million figure. It is simply the lowest number that I think is achievable. It would still leave CEOs extraordinary well-paid compared with the their predecessors and their counterparts aboard.

This very simple solution would cure the problem immediately. Is it politically possible? Yes, if CEO pay becomes a big political issue. In fact, this may be the sole issue on which the Trump and Clinton voter can agree. And it is the low-hanging fruit. If American cannot fix something so outrageous, inequitable, illogical and unjustifiable, we are on our way to plutocracy.

Steven Clifford served as CEO for King Broadcasting Co. for five years and National Mobile Television for nine years. His book, “The CEO Pay Machine,” was published this month.