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If you are 10% better at something than the second best in the world (that is, you are the best), than you are going to get paid way more than 10% more. Even if
by smabie 6y ago
If you are 10% better at something than the second best in the world (that is, you are the best), than you are going to get paid way more than 10% more. Even if you're not the best, 10% better than someone else is going net you a disproportionate amount of money.
The reason for this is that skill tends to fall along a normal distribution. As you get better and better, the number of people as good as you starts to fall at an exponential rate.
But, for your example, I don't CEO compensation in many cases has much to do with the value you provide. CEOs of bigger companies usually get paid more not because they are better but because there is more money that they can personally capture, since the companies they run are large.
And then there are CEOs that are incredibly compensated, like Cook and Nadela because they truly are providing incredible value.