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Comment by bluGill | Hacker News Reader

There have been many examples of a CEO retiring and the replacement running the company into the ground. Thus if you find a good CEO they are well worth a much larger salary (if that is what it takes to get them) to ensure they stay on the job working for you. A good CEO is well worth the price because of how well the company does. Luck is a factor in how much a company grows, but bad management is the largest factor in how fast the company fails.

Of course why you would pay such high salaries to a CEO who is untried and might turn out to destroy the company is a valid question.

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I draw a parallel between that argument and the one that comes up sometimes that farmers should be paid big bucks because their output is critical to society in a way that, eg, a soccer player's is not.

The issue isn't that good CEOs add a lot of value - clearly true. The issue is why are they being allowed to capture that value despite fierce competition? Nobody else is allowed to do that. If there are 10 willing & hypercompetent people paid <$1,000,000 available to do your job, it shouldn't be feasible for you to earn >$2,000,000 unless there is something very strange happening. Like a very effective guild system and control of the corporate budget.

Exactly as you say, it isn't like we can differentiate between these people in advance. Why do we think paying them more will help? In any other field you can get exceptional talent for far less than a CEOs salary.

> Thus if you find a good CEO they are well worth a much larger salary

Of course. And to be clear I'm not quibbling about CEO pay being higher than the minimum wage.

The question that I've an issue with is how much larger. Back in the 1950s the answer seemed to be 20x the minimum wage or whereabouts. Nowadays it's more like 360x. [0]

CEOs were doing the same kind of job at the time.

And just think about it: it means the typical large company CEO earns in one day what his baseline employees earn in a whole year. That's just a recipe for a French or Russia style Revolution to erupt.

Plus, who actually needs $1M/year? I've earned fairly good money for years -- but still a fraction of that -- and I'd have no idea how to spend that much without investing up the wazoo. And in case you're thinking "I'd know how", sure, the answer is yes, everyone does -- for a few months. As a salary, $1M/year is ludicrous. And $10+M/year is sociopathic. No one is worth that much.

[0]: https://www.forbes.com/sites/dianahembree/2018/05/22/ceo-pay...

When you live that lifestyle you learn to spend it. A friend of mind used to rent an apartment to someone making $40k/month - the renter was often late paying her monthly $500 rent because she was out of money until next payday (the apartment was a third home used only to visit her kid who was going to school nearby). When you can afford to buy any neat car you see after a while it no longer occurs to you that maybe you shouldn't buy it anyway.

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