The legal doctrine that a company's primary responsibility is to maximize shareholder value dates from the 1970s. It started with Milton Friedman with a 1971 essay in the NYTimes [1] and then gained a lot of currency throughout the 70s stagflation and economic malaise. The final death-knell of the corporation as a social enterprise came during the 1980s era of corporate raiders and PE buyouts.

Note that the system that came before it had problems too. In the 50s and 60s, the top marginal tax rate was about 90%, which meant that above a certain level it made almost no sense for a corporate executive to be paid more. This kept executive salaries to a reasonable multiple of employee salaries, but it meant that executives and high-ranking managers tended to pay themselves in perks. This was the "Mad Men" era of private jets, private company apartments, secretaries who were playthings, etc. Friedman's essay was basically arguing against this world of corporate unaccountability and corruption, where formal pay and compensation were reasonable, but informal perks and arrangements managed to privilege the people in power in a complete opaque, unaccountable way.

Turns out that power is a hell of a drug, and the people in power will always find ways to use that to enrich themselves regardless of what the laws and incentives are.

[1] https://www.nytimes.com/1970/09/13/archives/a-friedman-doctr...