Seven times the minimum salary isn't an "arbitrary limit", the owner of the company I mentioned spent quite a bit of time figuring out that amount. At the time I met the owner of that company he was making $350k and the janitor was making $50k. If the janitor wasn't worth $50k, he would fire him, it's that simple. He told me that the janitor was very good at his job, and had been working for him for many years.
What happens when that janitor retires, and new janitorial staff is needed? Does the firm now need to find another janitor worth $50,000, reduce the pay of all their top staff (who are doing excellent work and increasing the profitability of the company), or do without a janitor (forcing people making $100,000 doing highly profitable engineering to take time from their work to clean the bathrooms)? I fully intend to be a business owner in the future, and absolutely plan to tie my employees compensation to their performance and to the company's success. However, an arbitrary tie between the amount I pay my key innovators I would have a hard time replacing and the amount I pay someone to come in and clean the lobby isn't logical.
Pay should be based on the value of the contribution, the difficulty of replacement, and the demands of the person you want to do the job. If I'm not happy with what I'm being paid, I start looking for a new position. I feel no loyalty to my employer to work for them if they aren't willing to compensate me adequately, just as they feel no loyalty to me if I don't produce enough value for them. If I like my employer, I'll let them know I'd like a raise before quitting or give 2 weeks notice (as a courtesy). If I don't like them, I'll just notify them I won't be working for them starting tomorrow because they aren't paying me enough (I have no long term contract). If they like me, they will tell me areas they'd like me to improve or how they need me to redirect my work from a non-profitable section of the company to something more useful. If they don't care about me (and most companies don't), they'll just let me know they no longer think they need me not to show up the next day.
Honestly, I really don't understand this attitude of "corporate loyalty" people seem to have. It's like you're a medieval peasant with loyalty to your local noble. The attitude of "noblese oblige" where the upper class acts as father and protector to their people is long dead, if indeed it ever even existed. Workers today have power like never before in history. If you reward good employers with your work and punish bad employers by leaving, the bad employers will go out of business. If you can't find a good employer, save your money and start your own business. If the big CEOs are really as useless as you think, surely you can do better?