Good this topic gets brought up. I've blogged about this in the past: http://blog.translusion.com/posts/CEO%20Salaries/ http://blog.translusion.com/posts/CEO%20

Good this topic gets brought up. I've blogged about this in the past: http://blog.translusion.com/posts/CEO%20Salaries/ http://blog.translusion.com/posts/CEO%20Salaries/ Studies by Gabaix and Lanier, who were in favor of performance based pay showed that the difference between the best CEO and the 250th best was 0.016 percent. Meaning if one replaced the 250th best CEO with the best, then the companies market capitalization would grow by 0.016 percent. Perhaps what really matters is how bad the CEO is not how good he/she is. E.g. it is like studies of parenting, there is no difference in outcome for kids with awesome parents and those with average middle-class parents. The big difference is between bad parents and average parents. Something similar with IQ. There is no difference between having 130 in IQ and having 200, with respect to your chances of winning the nobel prize. But there is a noticable difference between having say 100 and 130.