Companies should definitely be all about rewarding good behavior. When someone is compensated for bad behavior it gives the subconscious mind a signal that tells it that bad behavior is rewarded. Companies should strive to make sure that only good actions are happening as a result of the company's actions.
With that being said, senior level management compensation is set by a board of directors. Who's on that board? Other rich people - usually CEO's or other very wealthy, connected or "successful" people. It's in their self preserved best interest to keep the sky high, ludicrous compensation scheme going - their turn comes around every so often as well.
Whether it's $17M or $58M is irrelevant. That much money for 15 months of service is disgusting and irrevocably exposes the greed and corruption at the top of many (dare I say "most") large companies.
While this story does not surprise me none, it sure does irritate me. They cut unemployment benefits on poor people, but executive's who are bad at their job get bought out. I am sure it is because they do not want the execs to go out and join the competition, but it is very hypocritical.
A CEO has a very clear job description: He is to be the face of the company, to reassure investors and show the world that the company which he runs is headed in the right direction. When a company loses value and its market share diminishes, the CEO should be the first to blame. He is essentially the captain of the ship, and is responsible for the smooth sailing of his company. The value of a company rests in his hands, and when he leaves after the company has sunk, he shouldn't carry away even more of whatever value is left.