This is self-fulfilling. There is a claim that CEOs are well paid because they're in high demand. The truth is that it's actually difficult to find someone who will work for minimum wage in a In-n-Out burger in San Jose. It's easy to find a dozen qualified candidates for CEO - hell, half of them are CEOs at similar smaller companies and the other half are CxOs/SVPs at the company you're hiring for. The myth is that you need some massive salary to attract the best, whereas what actually happens is you hire who you would've hired anyway, but you pay them a massive premium.

> The myth is that you need some massive salary to attract the best, whereas what actually happens is you hire who you would've hired anyway, but you pay them a massive premium.

Microsoft’s market capitalization has more than doubled during Satya Nadella’s tenure as CEO. When Steve Ballmet quit as CEO the market cap jumped over $100 million. That kind of difference is why companies pay extremely well for top CEO talent. Management is a skill, some people are really great at managing large, complex, profitable organizations and they’re worth a lot of money.

My takeaway is that Steve Ballmer was paid million of dollars despite being worth negative $100m to MSFT.

CEOs are broadly speaking benchmarked on return on equity for investors. They receive high salaries in anticipation of their doing a good job, and if they don't they're removed. Further, a disproportionate amount of their compensation is equity based to align their incentives. I'm not saying it's right or wrong, just that they are expected to justify their pay too.

> They receive high salaries in anticipation of their doing a good job, and if they don't they're removed.

When they get removed, they often receive golden parachutes even if they seriously effed up the company.

This can't be explained by return on equity. I guess it can be explained by bargaining power or cronyism, or perhaps other things I'm not thinking of.

I won't claim the system isn't corrupt at all... but if you were taking a job where the expectations were ridiculously high and there was a pretty chance you'd get fired possibly for things outside of your control, and in a way that would end your career because your failure would be so public if you screwed up, wouldn't you demand the golden parachute as insurance?

True often the golden parachutes are way too high compared to realistic performance bonuses. But if you think of that as insurance - the board and the CEO both know this is risky, so they negotiate a fixed golden parachute just in case it doesn't work out - otherwise why would someone who wouldn't get fired take the job, since they wouldn't want to risk the downside?