[lefstathiou]

I believe CEOs are compensated what they are in order to get them thinking like “owners” which many “professional” CEOs are not ultimately. Mark Zuckerberg, Steve Ballmer, Gates, Jobs don’t/didn’t need large salaries because their identities were tied to their companies.

Owners eat sleep and breath their company in a way the average salaried employee plucked at random from +10,000 employee company will not. To the points made by other comments, the CEO is entrusted to make decisions that can ripple through thousands instantly. The amount of value they can create or destroy in an instant is probably roughly in line with the multiple they are paid over the average employee. Thus their negotiating leverage is high and equity holders are happy to pay the price.

Said differently, if you owned all the equity of Google, how much would you be willing to pay to ensure that equity is protected? I think that number is more than 10x the salary of the average Google developer.

This is subject to the laws of supply and demand like any other system and it is pretty rational.

[CptFribble]

This is actually pretty insightful, and it leads to an interesting question:

If CEO pay is a rational outcome of protecting the equity in a company, and CEO pay is too high, does that mean there's "too much" equity?

There's some evidence that income inequality is bad for society in some ways, which I tend to agree with if it means inefficient/uneven distribution of resources/opportunities/community investments. In this sense, and considering the previous question of "too much equity," is it possible that a company's market value can be too high?

[pm90]

Too high in what sense? Just too high in absolute dollars? Equity is not the same as cash; its a gamble: you're willing to pay a certain amount of money for something that you're betting will increase (or at least hold) value.

[bitxbit]

You really should not be a CEO if you’re mostly in it for the money. That’s not leadership.