[roenxi]

It is highly suggestive that CEOs are the ones who determine the pay of CEOs, in practice. If the shareholders actually had to negotiate the remuneration packages I bet the CEOs wouldn't be able to command the salaries that they do. There isn't enough evidence that paying more for a CEO increases profits.

The upper middle management strata is stuffed with exceptional people and the skillset to be a good CEO isn't actually that rare; it probably isn't a supply issue.

[gradys]

Isn't CEO compensation generally determined by the compensation committee of the board?

[nopzor]

at a large enough company with an independent enough board, sure. but these committees are largely driven by ceremony and politics under the guise of having to do with objectivity.