I think there's advantages to having a pyramid-type management structure, and that said a lot of factors, 'legit', however you might define that, and otherwise go into making someone a candidate for the top positions. That someone values him/herself more than the government would have them get - that wouldn't seem to be necessarily a bad omen with respect to stocks, earnings, capability. The circumstances leading up to the bailout - there'd tend to be paycut for that, and the understanding that the gig they were leaving was going to pay a finite amount, but they can get sniped for what the market will bear. Once they get in the door, there will still be the pretext that they'd made more and at least to whoever ends up taking them the possibility non-culpability for the previous failure - thus, if they prove themselves, the second trip up the ladder might be faster.
I think there are more 99-percent matches for exec than there are people who make it, again for lots of reasons I don't intend to parse out and pass judgment on, and mobility is a good thing for companies and employees, so yeah, other candidates can and should move up to vacated spots - but being second-rate would be a stigma against the candidate/position if he/she couldn't turn it around. In turn, in a company that gets barked at for profiting, and gets barked at for losing money - aw crud, maybe I'm being cynical, maybe people will follow civic-mindedness in a leader.