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> From 1978 to 2021, CEO pay grew by 1,460%, adjusted for inflation, versus just 18.1% for the typical worker. Why has the supply of CEOs not kept up with the

• kortilla 3y ago
  There is no academic training to be a good CEO. They are not easily replaceable. If they were, board members wouldn’t bother offering such high pay. Shareholders don’t appreciate wasting money.
  • hinkley 3y ago
    But if we offer more money, surely we will attract the attention of a better CEO!
    • secabeen 3y ago
      No one wants to hire a below average CEO! Our CEO needs to be Above Average, so we better pay above the median! And so the salaries spiral up and up......
  • thechao 3y ago
    They've become 14.6x more efficient at ... what? Increasing their pay? C'mon.
    • version_five 3y ago
      Like it or not, they've become more efficient at maximizing shareholder returns. 1978 to present included all sorts of financial shenanigans designed to turn a company from the old school "return on assets" model to a financial vehicle that profits on the spread between it's revenue stream and financing costs. I think it's shit too, but the job turned from running a company go making money appear, and the pay went with it. Don't hate the player, hate the game (seriously, the system is screwed up horribly)
      • brutusborn 3y ago
        Any idea why this change occurred? I know it’s probably multifaceted, but my first thought was that increasing inflation since the 70s has meant that there is an incentive to have as much debt as possible, the hope being that it will be inflated away
        • kelseyfrog 3y ago
          The Friedman doctrine[1] + hyperstition[2]. 1. Friedman, Milton. "The Social Responsibility of Business Is to Increase Its Profits." The New York Times, 13 September 1970, https://web.archive.org/web/20230913104415/https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html https://web.archive.org/web/20230913104415/https://www.nytim... 2. Carstens, Delphi. "HYPERSTITION." Xenopraxis, n.d., http://xenopraxis.net/readings/carstens_hyperstition.pdf http://xenopraxis.net/readings/carstens_hyperstition.pdf.
        • logicchains 3y ago
          With the complete end of the gold standard in the 1970s, the government/fed's been free to create as much USD as it wants. The benefit of newly created money goes to those who spend it first (it's essentially a wealth transfer from those who get it last to those who get it first), and it's the banking/financial system that generally gets first dibs on this newly created money. This means there's a continuous, persistent transfer of wealth from the real economy to the financial system. In theory this wouldn't happen if the fed instead created money by e.g. dropping it out of helicopters equally to everybody (or direct transfers to their bank accounts), but the whole financial industry has a vested interested in keeping the current approach.
          • lifeisstillgood 3y ago
            This is such a simple and clear explanation of the financialisation of society I just wanted to keep a reference
      • kelseyfrog 3y ago
        Genuine question, have you tried hating the game and observed the response? I'm curious if your experience has been the same as mine?
    • kube-system 3y ago
      The person you're replying to is suggesting that their pay rates are inelastic due to scarcity.
    • kortilla 3y ago
      Price is based on how difficult it is to find someone that won’t drive a massive company awry, not based on them becoming better.
      • thechao 3y ago
        Like Carly Fiorina? The pay for CEOs is set by the board, and the board of most large companies is made up of CEO's from other large companies. It's the private equivalent of plutocracy.
        • kortilla 3y ago
          The board is not made of other CEOs
  • throw0101b 3y ago
    > There is no training to be a good CEO. They are not easily replaceable. If Steve Jobs—who first created and then basically rescued Apple and started it on the path to where it is today—can be 'replaced' then any other leader can be replaced. Similarly there are plenty of CEOs that are paid oodles of money that were or are absolute garbage: see Boeing for the last 15+ years as Exhibit A.
    • kortilla 3y ago
      He was replaced, but not with someone as good. Apple has done well under Tim Cook, but there is an obvious lack of innovative vision since Steve’s passing.
      • beej71 3y ago
        Perhaps if they offered a pay increase they could attract someone better, but maybe they can't afford it.
      • jedberg 3y ago
        The Apple Watch launched 4 years after he died. He probably wasn't involved in that at all, or just barely. Which means that was all Cook's doing. It's now a multi-billion dollar business on its own. AirPods launched 5 years after he died. It's highly unlikely he was involved at all. That's now also a multi-billion dollar business. Apple Vision is about to come out. I wouldn't be surprised if that turns into a mult-billion dollar business after a few years. Yes, Tim Cook does not have the charisma of Steve Jobs, and probably doesn't have the design sense either. But he's awfully good at putting the right people in the right places to steer the ship with him and have quite a strong vision of the future.
    • turnsout 3y ago
      Steve was replaced with one of the greatest minds in Operations that history has ever known, and much of Apple's success under Steve was thanks to Tim. So Apple is not the best example if you're trying to show "CEOs don't matter."
      • 3y ago
  • dymk 3y ago
    Of course there is training to be a CEO. Do you think all the good CEOs were born with the knowledge to be a CEO?
    • l33t7332273 3y ago
      [flagged]
  • nerdponx 3y ago
    The argument is not that CEOs are not valuable. The argument is that there's no obvious increase in their value since the 70s that might justify their relative pay increase.
  • pydry 3y ago
    Since there's no pay penalty for being a bad CEO (pay correlates almost exclusively with company size) I guess we can assume that being good at the job is not the quality most important to those who do the selection.
• polemic 3y ago
  Alternatively, as many argue, wages are not only set by supply and demand.
• Invictus0 3y ago
  What if CEOs were underpaid in 1978?
  • dymk 3y ago
    They weren't
• endisneigh 3y ago
  the supply of prospective management people definitely has kept up. there are literally tens of thousands of MBAs graduating every year, to say nothing of managers at existing F500 companies. there are only so many large companies, and thus so many CEOs. look at tiny barely profitable companies, the gap between median wage and CEO is sometimes less than 2X. all these takes on CEO pay when the reality is simple - CEOs are paid a lot because they the cost of being wrong is more than their pay. this results in companies that have a lot of money competing, driving up the price. the end. it's the same reason lebron james is paid 10X more than NBA average.
  • nerdponx 3y ago
    > there are only so many large companies, and thus so many CEOs This is a statement that there is low quantity demanded by the market. It's actually a great example of how the naive supply-and-demand argument doesn't make a lot of sense.
    • endisneigh 3y ago
      how so? low supply, high demand for "perceived" good ceos. thus those large corporations can throw money at talent.
• astrange 3y ago
  It depends how they're counting. There was an example in Money Stuff this week where a CEO got a pay package "worth $110 million". It's actually made of stock options that vest if the share price went above $150, but the expected value was $110 million so that's what was reported. …But the share price only reached $66. So in fact he was paid zero, and he quit. (Well, $1.5 million in cash.) https://www.wsj.com/business/ceo-with-110-million-pay-package-is-suddenly-out-7907c56f?mod=hp_lead_pos4 https://www.wsj.com/business/ceo-with-110-million-pay-packag...
  • vel0city 3y ago
    > paid zero > paid $1.5 million in cash These are two wildly different things.
    • outside1234 3y ago
      Yes - that is serious tails I win heads you lose sort of numbers
    • jjoonathan 3y ago
      Just think of all the risk that executive took by potentially only earning $1.5 million dollars! EDIT: called it, MichaelDickens just made this argument unironically.
    • MichaelDickens 3y ago
      $1.5 million is approximately $0 in comparison to the originally-quoted $110 million—it's less than 2% of the original amount.
      • ceejayoz 3y ago
        And yet, a massively life-changing annual salary level for almost all Americans.
      • ramranch 3y ago
        You don't spend a percentage, you spend a fixed amount. $1.5 million is enough to live in a nice house, eat what you want, send your kids to nice schools, Aruba in the summer and Aspen in the winter, and still have enough to buy a very fast car. It's easier to focus on EV once you live this life.
• distortionfield 3y ago
  Absolute lukewarm take here. Wages are not only set by supply and demand. Institutional power, regulatory concerns, etc... are huge factors in compensation, too. You can argue they're abstracted over by the market anyway, but you're not saying anything interesting until you dive into the tensions between those concerns. And that's not even touching the fact that the workers are clearly valuable and irreplaceable enough that they can halt production like this.
• fallingfrog 3y ago
  “Supply and demand” is a very limited special case of a broader principal, which is that pay reflects power. CEO’s power and control over their own pay has increased, and the power of regular workers has decreased. There are a myriad of reasons for this but it’s certainly deliberate.
• r3trohack3r 3y ago
  Not all jobs have quantitative measures for impact. The more a job is decoupled from a measurable value, the more likely that job is to be bid up to "as much as the company can afford." I've seen this in my career, the closer I get to "SRE" or "platform engineer" the more decoupled my salary has become from my actual measurable value. I'd articulate the thinking as, roughly: We know this role is important. We know that having a bad SRE team (or CEO or platform team) is expensive, it could cost us the 100% of the business. And we don't know how to measure the value a good one provides. Therefore we are willing to spend as much as we can afford to make sure we get a good one.
  • candiddevmike 3y ago
    SREs aren't on the board of directors setting the pay for other SREs who are on their board of directors though. The elite/ownership/"capitalism winner" class are playing on an entirely different level with their power and influence. Don't kid yourself into drawing comparisons with your situation and miniscule in comparison compensation. It's always heads they win, tails you lose.
    • smfjaw 3y ago
      [flagged]
      • Jaygles 3y ago
        The people who decide where money gets allocated are allocating most of it to themselves? If this was done in a government it would be called extreme corruption.
        • jjoonathan 3y ago
          But but competition keeps them in check!!! (Competition between the two players in the market that have a revolving door of executives, a carefully crafted moat a mile wide, and raise prices together in lock-step but definitely do not collude, no sir!)
        • 3y ago
• chiefalchemist 3y ago
  Yes. But now take CEOs and their pay and map it to company performance and stock performance. Are they skilled at bringing out the best in their company, or squeezing staff wages more and more?
• hackerlight 3y ago
  Is that an apples to apples comparison? Is the mean inflation-adjusted market cap of all the companies in both their 1978 dataset and 2021 dataset the same?
• gretch 3y ago
  I support the workers' decision and negotiating on labor rates is the basis of our economic system. Get what you deserve. That said, the CEO pay is easily explainable: > Profits at the struck auto companies increased 92% from 2013 to 2022, totaling $250 billion, according to EPI > CEO pay at the Big Three has grown 40% in the last decade, according to EPI If you're the CEO of a company and you increased profits by 92%, I don't know seems pretty fair to me. There's a lot of other businesses that suck and haven't raised their profits in the meanwhile. I think talking about the CEO pay is the wrong path (though I do admit it's marketable in the mainstream news). Just ask for what you think you deserve and don't work if you don't get it. It's as simple as that.
  • pratheekrebala 3y ago
    The workers also contributed to that 92% increase in profit.
    • waynesonfire 3y ago
      And they got 18.1% for it.
      • toomuchtodo 3y ago
        The effort is to close that gap. Can’t build cars without workers. Elon famously tried and failed. https://techcrunch.com/2018/04/13/elon-musk-says-humans-are-underrated-calls-teslas-excessive-automation-a-mistake/ https://techcrunch.com/2018/04/13/elon-musk-says-humans-are-... (“Elon Musk says ‘humans are underrated,’ calls Tesla’s ‘excessive automation’ a ‘mistake’”)
        • dgacmu 3y ago
          Tangent: This is a mathematically muddled discussion that turns out to be about right anyway. If profits went from $5 per year to 10, they increased by 100%, but that doesn't mean that you have room for a 100% increase in everybody's salaries. A much better way to have this discussion would be to look at the dollar value increase in profits versus salaries. Profits are forecast to be about $32b in 2023, up from about $19b in 2013. At about 240k total employees, and an average union pay of about $30/hr - call that about $90k year fully burdened per employee - a 40% increase would cost the company about $8.6B, or about 2/3 of the growth in profits. That may be overestimating the costs, as there are only 146k workers in the union, in which case the $5.2b increase in employee costs is... 40% of the profit growth, which seems like an entirely reasonable split of employee vs shareholder gains.
• highwaylights 3y ago
  To paint the above in starker terms: Worker pay is set by the leadership, leadership pay is set by the leadership.
  • ripvanwinkle 3y ago
    [flagged]
  • kangaroozach 3y ago
    100% this. Leadership gets to decide how insanely hooked up they will be. Same as congress. Remember when they carved themselves out their own Health Insurance requirements? Same thing.
    • astrange 3y ago
      That hasn't been true for ~13 years now, Congress's healthcare comes from ACA exchanges.
      • deleted 3y ago
        [deleted]
      • r00fus 3y ago
        While this is true, they do get 72% of the premiums paid for by the USG, as well as numerous perks like free onsite visits from OAP etc. Not unlike some large employers.
        • astrange 3y ago
          I remember I was reading a subreddit for actually rich people (/r/fatFIRE) and there was a thread about concierge doctors; everything about the service sounded worse than FAANG health benefits I've used. (Which does include an onsite doctor's office.)
  • hellojesus 3y ago
    Leadership is set by shareholders. There is still accountability. Public unions seem more undesirable. There we have the gov negotiating with itself with no external accountability, unlike your example.
• adventured 3y ago
  > Use the same framework to explain CEO pay. Sure. It's the same framework that explains the pay of Lebron James. The NBA became a massively popular global game during the era of fast growth globalization, in which billions of consumers entered into the active global economy. Now you've got like 50 players earning $30m or more per year in the NBA. To play a game in just the US market. ~450 active players earning around $5 billion per year in just league salary (not counting endorsements). Now do it for global football, NFL football, Nascar, Major League Baseball, Hockey, F1, and so on. Who knows the insane total compensation figure. $30 billion? The economic force producing that comically massive figure, is the exact same reason Tim Cook is worth every dollar he's getting paid to operate the juggernaut that is Apple. The same goes for Nadella at Microsoft. The top 450 NBA players earn more in salary every year than the CEOs of the S&P 500. Why shouldn't a CEO get paid extraordinarily well, as well as an NBA all-star, for operating a $10 or $20 billion market cap corporation? Obviously they should. The only time I see arguments against high CEO pay (speaking generally), it's from people that know absolutely nothing about what a CEO does or how exceptionally difficult it is to operate a very big company. And should mediocre CEOs that fail or otherwise perform poorly get golden parachutes? No, of course not. Exceptional CEOs should get properly exceptional pay. They deserve to earn drastically more than the average worker. The common Redditor railing against CEO pay, looks at a Tim Cook and thinks they can maybe do what Cook does (he just sits in his chair in a big office while other people do all the work, dur dur dur), or what Nadella does, or a random S&P 500 CEO does. In reality they can barely do their own basic job, much less one ten tiers above them. The average Redditor is further away from being able to do Tim Cook's job than they are being able to do the job of Lebron James. The issue is the average person doesn't know anything about what a CEO does at all, they're entirely ignorant of it. However they can watch Lebron James play basketball and immediately understand they can't do anything like what James can do, because they get the physical visual display immediately, meanwhile they know zip about the job of a CEO at a big company. As usual the issue is extreme ignorance and mediocre education.
  • davorak 3y ago
    > The only time I see arguments against high CEO pay (speaking generally), it's from people that know absolutely nothing about what a CEO does or how exceptionally difficult it is to operate a very big company. The most common argument I see is that the ceo pay has increased relative to the common or average employee salary. I doubt being a ceo has become that much more difficult over the same time period though.
• drt5b7j 3y ago
  Because the number 1 quality that you want in a CEO is that he has experience being CEO, and there aren't that many openings for you to get in on it, and the ones that are are given to people who's been CEO before. Obviously.
  • jjoonathan 3y ago
    No, the number 1 quality I, as a board member, want in a CEO is that he will vote me a massive pay package when I take my turn.
• TaylorAlexander 3y ago
  > As many argue, wages are only set by supply and demand. Most of the time that I see people invoke "Econ 101" concepts, they are wrong. Supply and demand does not account for the power imbalance between workers and leadership, which unions specifically attempt to address. It does not account for the class differences between workers trying to make ends meet and the board of directors who believe they deserve much higher pay than workers. We are free to change the perceived value of workers through the power of worker solidarity - ensuring that individual workers are not so easily replaced to keep wages suppressed. You can simply say "it's supply and demand" and do nothing to support the workers whose labor is so clearly needed for our economy to function, or we can support collective bargaining rights to make sure that individual workers are not crushed under the power of company leadership. How you view this is up to you, and not a simple fact of natural laws of economics.
  • WalterBright 3y ago
    > Supply and demand does not account for ... Yes, it does, in each scenario you presented. > We are free to change the perceived value of workers through the power of worker solidarity It's more like using the power of government to ensure the company has no alternative to the union. Company leaders have no actual power over the workers. They cannot force anyone to come to work. They cannot have you arrested. They cannot confiscate your property. They cannot beat you. They cannot prevent you from accepting a job at another company. They cannot prevent you from leaving. They cannot extort, libel, slander, blackmail, or threaten you. They cannot put a hit on you. All they can do is offer you money in exchange for your labor. That's it.
    • astrange 3y ago
      > They cannot prevent you from accepting a job at another company. They can totally do that with a non-compete clause. Just not in California.
      • sib 3y ago
        I'm pretty sure that there is no US state where a company can "prevent you from accepting a job at another company." In some states, and in some circumstances, they may be able to prevent you from accepting a job at a competitive company.
• kwar13 3y ago
  More like the CEO pay is a cushy symbiotic relationship with the board, which sets their pay. This is not a line worker job when there's competition.
• lumost 3y ago
  What we choose to value as society is entirely subjective. While supply and demand influence the change in the mid point of the bid/ask spread - it doesn’t set the absolute clearing price.
• MuffinFlavored 3y ago
  Stellantis has 270,000+ employees across 16 brands. I'm not saying their CEO does or doesn't deserve $20m in compensation but at some point you're going to run into a problem where... nobody wants to do that job for $1m/yr and they wouldn't be qualified or very good at it.
  • kibwen 3y ago
    > nobody wants to do that job for $1m/yr I invite everyone here to raise their hand if they're just as hard-pressed as me to think of any job that they wouldn't do for a million per year.
    • CraigRo 3y ago
      Nobody who is qualified to do it... I've worked with executives at that level, and let's face it-- most of us don't have the single-minded devotion to do it, nor the experience to manage thousands of people.
      • ZephyrBlu 3y ago
        I do not understand people that believe all executive are useless and do nothing.
        • no_wizard 3y ago
          Can you blame anyone? For decades, average workers have faced layoffs, shrinking wages, stagnant career growth and numerous other downsides. For instance, Wells Fargo has gone through multiple layoffs and downsizing over the last 2 decades, and yet their CEOs have all gotten golden parachutes, never once facing the negative affects of their own decision making. There's so many examples of this it hardly makes front page news anymore.
        • fragmede 3y ago
          Between the failures of Kodak and RIM/Blackberry, and with hindsight being able to see how those falls could have been avoided, I've come to see the job in new light.
• colordrops 3y ago
  Are you being rhetorical, or are you actually positing that CEO pay is driven purely by supply and demand?
• jfghjhgfjhfg 3y ago
  [dead]
• randomdata 3y ago
  > Why has the supply of CEOs not kept up with the demand for them? Why would it?
  • jacobr1 3y ago
    Because the pool for a CEO hire is much smaller, than "people with MBAs" as has been floated in thread elsewhere. If you want to hire a CEO, you either usually are looking either at A) A CEO of another company with experiences relevant the current situation, at a size similar to the current company's size. Or B) A senior exec (CFO, COO, etc ...) at the same company, or more rarely an involved board member. These are self-limiting pools.
    • randomdata 3y ago
      So why would it?
• jcranmer 3y ago
  CEOs are an illiquid market, and demand for CEOs is pretty inelastic (companies need but one CEO after all). It's not a market which can reach price equilibrium. If you expand your horizon somewhat to C-suite in general, it seems that demand for C-suite has tended to increase over time. If you also consider that C-suite is to some degree a Veblen good (demand increases as price goes up) [1], that makes sense under economic laws. Worker pay, unlike executive pay, is going to be considered a significant cost center, and business will higher fewer workers if individual pay is growing too quickly, making worker pay act like regular goods and not Veblen goods. [1] The framework for setting CEO salaries tends to be "take the median CEO pay, add a little extra because our CEO's clearly better than average..."
  • queuebert 3y ago
    ... thus increasing the median CEO pay. Rinse and repeat and that explains a lot.
• oneTbrain23 3y ago
  CEO pay is adjusted based on another CEOs in the market. Since every board members has already markup their CEO pays higher and then higher, the increases are what you see today for CEO pay. Not every CEO skills at Steve/Tim/Jensen but they all delude themselves by paying high, hoping they will eventually get Elon-quality CEO into their company and make their stock the next Tesla-NVIDIA-Netflix. Most of the time, they get Stephen Elop type of CEO, unconsciously destroying company in the name of strategic stakeholder value maximization (MBA lingo). Now what about workers? The good one will just hop away. They then will tell everyone "no one is replaceable" and then go on to mis-hire even more incompetent or noob staff in. Or they will outsource it just like Dell and others during Bush Jr time. What they need to do is to publicly disclose the performance of their CEO. Have CEOs rated by staff and publicly distribute this info worldwide. They also need to implement clawback dating as far as a decade depending whatever products they in charge during their tenure. And lastly, always put full jail offenses directly on CEO without any plea bargain. Not doable? Then workers need to get retrenched as they rightly deserve it when they didnt bother to hop away.
• fallingknife 3y ago
  There are two determinants of your pay. One is supply and demand, and the other is how much could your potential replacement screw things up. For most workers the supply/demand is the only part that matters because if you are a line worker, you don't really have the potential to do much damage if you screw up. So if Ford needs to replace a competent line worker, their potential bad replacement won't be able to cost the company much even in the worst case, so this does not grant the worker any leverage. CEOs are much different. A bad CEO can cost a large company 10s of billions in stock valuation. If you have a decent CEO, and you fire and replace him with a poor replacement, the damage to the company will be tremendous, so the board won't want to risk it. This gives good CEOs the leverage to demand massive compensation. A CEO can basically hold the company hostage by saying "I want a $10 million raise this year, and if I don't get it I'll quit. Have fun rolling the dice with my replacement!" (Though they would never actually say it that way) And the company will basically have to choose to pay an extra $10 million or roll the dice on potentially losing billions. This is why they almost always pay CEOs a massive amount.
• AndrewKemendo 3y ago
  It's actually hard to find people who will reliably break unions, and generally do whatever it takes to de-prioritize line workers and eliminate "cost centers" - while also showing pure allegiance to the board without defecting. That's the entire process of creating the professional corporate managerial class - you have reliably shown that you care more about the financial success of the company, and yourself, than you care for your employees and coworkers. I mean how many movies and characters have we made that are precisely calling out this exact behavior: Gordon Gekko Bill Lumburgh Mr "Coffee is for closers" Blake Richard Chesler (Fight Club boss) etc... Like...we've been roasting this precise kind of corporate myopic psychopathic forever as what precisely not to be yet it's like an entire generation used them as pathfinders
• jandrewrogers 3y ago
  The fact that terrible CEOs obviously exist is what drives up the prices for the ones that are not obviously terrible. It is an extremely high leverage role (see also: Microsoft). What separates the good CEOs from the poor CEOs isn't something you can readily teach. Some of the best ones have a preternatural ability for the role in the same sense that Lionel Messi has a preternatural ability at his sport, and are equally rare. The majority of CEOs are journeymen with the skills to do the job but not to be great at it. This doesn't mean that average employees are fit to be CEOs; you don't have to look further than startup CEOs, which are pulled from an above average pool of semi-random people, to discredit that notion. It is a highly specialized skill set that is difficult to acquire and most people aren't mentally cut out for what is required to be good at it. The experiment of promoting rando employees to CEO has been tried on occasion across industry with almost universally poor results. This is true of most professions that command a high wage. Thinking that anyone could be a CEO is like thinking any dev can be Fabrice Bellard. Even if that turned out to be the case in a specific instance, no one should expect it to generalize.
• cft 3y ago
  During the same time, the US automakers worldwide market share shrunk from 30% to about 10%.
• gus_massa 3y ago
  That's almost a x100 increase. If you ignore Pelé, the top soccer player had a similar increase in the same period. https://www.expensivity.com/soccer-salary-inflation/ https://www.expensivity.com/soccer-salary-inflation/ Compared with the median income, they went from 10x in 1979 to 1300x in 2020. Why has the supply of Messis not kept up with the demand for them?
  • hn_throwaway_99 3y ago
    Thanks, I think this is the best answer and really gets at what is going on. "Star" pay has exploded across all industries (entertainment, sports, and yes, business) and it's not hard to see why. Technology has vastly grown the size of markets, and the "winner take all/most" dynamics of these star-driven occupations means the winners are able to take an outsize chunk of the revenue. I think there are some other things going on with CEO pay (CEO salaries are basically set by other CEOs, for example), but the parent comment absolutely gets it wrong when they say "the supply of potential CEOs has increased". In the competitive market for CEOs (as well as actors, musicians, sports stars, etc.), people are not interchangeable commodities. Someone who is only slightly better can be responsible for their corporation completely "winning" in some industry, and thus companies are willing to pay top dollar for this chance at getting the brass ring.
• TuringNYC 3y ago
  > From 1978 to 2021, CEO pay grew by 1,460%, adjusted for inflation, versus just 18.1% for the typical worker. We should remember that CEO pay is often equity linked, and thus can vary. Not sure if workers want large portions of pay equity linked. I remember I was once in discussion with a hedge fund for a job and they offerred a sliding scale of pay that was cash vs equity. The more equity I opted for, the greater the pay, since of course there was risk involved.
• hollerith 3y ago
  Because the board and the investors don't want just any MBA to be their CEO: they want a person with a record of success in leading organizations (or at least collaborating closely with such a leader).