Put yourself in the shoes of the board of directors and you'll find they too don't want to overpay for CEOs. But paychecks are market driven, and lowering the pay means you'll end up with a less experienced or worse CEO.

Executive pay hasn't been shown to correlate strongly with performance, and the board members and CEOs tend to have somewhat incestuous relationships.

I guess that would be a problem if board members were willing to take a hit on profitability to load up their pal. Maybe shareholders don't notice, or while the market is doing well they don't question it.

Except the fact that higher paid CEOs actually perform worse [0].

[0]https://www.forbes.com/sites/susanadams/2014/06/16/the-highe...

> the companies run by the CEOS who were paid at the top 10% of the scale, had the worst performance. How much worse? The firms returned 10% less to their shareholders than did their industry peers

By that metric isn't Amazon the worst company there is?

To their credit, Amazon is pretty diligent about making sure that high performing employees get pay raises to match their market. My record is a 30% raise, mostly by switching job functions from non-tech to a tech role.

I do not have statistics to back it, just my meandering experience, but could it not be that great CEOs are raised, not hired?