The argument that this is simply the market rate required to attract a person with the required skills can be proven false in so many ways, for example:
1. It's not a market, there is no job advertisement for the CEO role that the general population can apply for. If there were, and if it were to offer a fraction of "market", there would still be thousands of applications, and the top 1% of those candidates would absolutely do the job as well or better than the typical hand-picked candidate.
2. There are several roles in society that place enormous responsibility on those professionals and that only a handful of people in the world can do well, yet those jobs still pay low 6figures max. For example, nuclear engineer, aerospace engineer, state leader, and yes, ironically, most public hospital directors.
The sad reality is that executive pay is simply a result of incentives and the fact that corporate hierarchy gets very thin at the top. It has no relation to the competence or direct value-added of the executive.
I don’t agree on your first point. I do think power and talent is highly consolidated among a small number of executives. Especially when you look at (as most boards do) executives within a specific industry vertical.
That’s not to say those people guarantee success, but it is less of a risk than picking someone unknown and without the established network and direct relevant experience.
Again all this to say I don’t think shaming companies into paying less will work, we should just tax CEOs more and let companies pay what they want.
1. It's not a market, there is no job advertisement for the CEO role that the general population can apply for. If there were, and if it were to offer a fraction of "market", there would still be thousands of applications, and the top 1% of those candidates would absolutely do the job as well or better than the typical hand-picked candidate.
2. There are several roles in society that place enormous responsibility on those professionals and that only a handful of people in the world can do well, yet those jobs still pay low 6figures max. For example, nuclear engineer, aerospace engineer, state leader, and yes, ironically, most public hospital directors.
The sad reality is that executive pay is simply a result of incentives and the fact that corporate hierarchy gets very thin at the top. It has no relation to the competence or direct value-added of the executive.