【答案解析】By "how CEOs are paid—their incentives—matters, for them and society", the author means how the performances of the CEOs are evaluated is very important to themselves and also has important impact on the society. Through the 1970s, CEOs' pay increased with company size, they often created ever-expanding, unwieldy and inefficient conglomerates. This approach was bad for America and for shareholders. Then in 1980s and 1990s, compensation for CEOs was increasingly tied to a company's stock performance. A CEO could instantly earn lots of money by receiving "stock options". But this approach also led to new problems: executives manipulated reported profits to sustain stock prices. Some of them even exemplified illegal methods. Also, many CEOs would decrease advertising or research and development spending to hit profit targets.