[sbenj]

These arguments always seem to make the bait-and-switch of "Steve Jobs is worth this much money therefore CEO _ is as well", conflating people who's financial value we can see (it would be hard to argue with the financial value to Apple of Job's vision) with people who are simply in an advantageous position to skim money off the top.

This is so utterly clueless: "In light of this, the most natural explanation of high C.E.O. pay is that the value of a good C.E.O. is extraordinarily high.". Can't possibly imagine another reason why people in a position to influence how much money they're paid seem to end up with higher salaries. Nope, nothing comes to mind for me.

[WalterBright]

The thing about CEOs is they have enormous leverage over the future of their companies. The classic example is, of course, Apple, which has had numerous CEOs and one can compare their effects. Jobs took the company from near bankruptcy to the largest (by market cap) company in the world.

For another, Microsoft is in transition to a new CEO. Isn't it obvious what an absolutely enormous risk this is to MS shareholders, employees, stakeholders? A good decision here, a bad decision there, has very visible and costly effects, affecting an awful lot of people.

Their CEO pay is almost meaningless next to this kind of leverage. Any business is going to want the best CEO they can get, and that of course bids up the compensation packages.

I'm a Microsoft and Apple shareholder. Do I care what CEO they pick? You bet. Do I care what their compensation is? I care if they get a CEO that costs or makes the company billions far more than the pittance it will cost me in CEO compensation (as CEO compensation comes out of the shareholders' hide).

[staunch]

What you individually care about as a shareholder is really not as relevant as you may think. Unless you're holding onto your Apple and Microsoft shares over 30+ years you're not looking at the health of the company from the same perspective as the CEO and Board should be.

Their job is to look out for all shareholders, not just the ones that want to see their portfolio's value increase in the next 5 years.

It's true that the amount CEOs are paid is relatively unimportant, but you're absolutely wrong if you think how they're compensated isn't important. The difference between giving vested stock options vs cash (for example) gives you very a different incentive structure.

[WalterBright]

> What you individually care about as a shareholder is really not as relevant as you may think.

It's 100% relevant to my buy/sell decisions, and the market aggregate of that is what sets the share price, and that's a very strong signal to management.

[firstOrder]

Absolutely. It starts off talking about Downey, who has been working as an actor since the age of five, studying, honing his craft, and then working for months on a project to make a 142 minute film of which he is on screen much of the time, a project that made $1.5 billion. He then does the bait-and-switch of comparing someone who works to idle class rentier parasite heirs who have never done a day of work in their lives, the kind of people you see in the documentary "Born Rich".

[waps]

Exactly. And guess which of those groups is the larger one ?

I think the real problem with CEO positions is that of bad actors. A certain Nokia CEO would could be a good example. Took nokia from bad into disaster and then sold the company to the "real" people who hired him.

A CEO is something you must have and who is an enormous risk if he's a sellout. So one has to give them a lot of money to try to lessen that incentive. It's that simple. It's the same reason you don't underpay the people with their hands on the nuclear weapons triggers.

As Nokia demonstrated (and it's not the only one), even doing that does not yield guarantees.

The problem is the opposite. Coming from one of Europe's quasi-socialist states, rewarding the "deserving" doesn't work. Firstly because you don't know who is deserving and because government committees, well, are were the term "politics" got it's sour taste. All important positions in the EU, for example, are filled, just like congress, with very rich people. Having consulted from them I personally guarantee they are from the "born rich" variety. Coincidence ? No. And those are effectively the only 2 options.

It's far better to go with the option where (you try to make sure) the incentives for the CEO and the people that want to benefit of him are aligned.

[ahomescu1]

> The problem is the opposite. Coming from one of Europe's quasi-socialist states, rewarding the "deserving" doesn't work.

Coming from another one of Europe's quasi-socialist states (Romania), not rewarding the brightest, most capable and hardworking is also bad. Many poor countries have significant brain drain towards the rich/developed ones.

[alexeisadeski3]

He draws from evidence from privately owned corporations, and the pay they give their CEOs, as evidence that there is not something inherently broken in the boardroom which causes CEO pay to be high.