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Comment by thehappypm | Hacker News Reader

Kyle's dad is the coach of your soccer team, right? Kyle's dad gets really really excited when you do well. He makes it fun, and you love going to practice! And you guys seem to win a lot!

Do you remember last year, when Mike's dad was the coach? He yelled a lot, you hated going to practice, he made you cry? And you never seemed to win?

Because Kyle's dad is a better coach, you win more. He's worth more to the team. Even though Kyle's dad isn't actually playing on the field, he makes you guys win. That's what a CEO does -- he makes a team win.

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Right, lots of wins are good, but why does the coach need to get paid $100M? Why is $1M not good enough?

Let me guess: because being a coach is so hard, and requires so incredibly much smarts and talent that only a precious few people have?

Many people with the skills to be CEOs of important companies would consider $1M a rounding error. It makes no difference to their economic outlook.

Also, there are many ways to make $1M without the risk and responsibility of being a CEO (among other things, just making low-risk investments with a $20M portfolio).

So between the comparative ease of making $1M elsewhere, and the low impact of $1M (to someone with tens of millions in the bank), it's not surprising why such people cannot be had for that price.

Are you saying that, as a result of being so incredibly talented, by definition, executives are already rich and therefore have to be paid more to keep them around for their valuable services and wisdom?

I take no position on talent or wisdom, but yes the kinds of people capable of being F500 CEOs are mostly already in this category of richness.

If this is true, why don't companies just higher people who are willing to be CEO for less money?

Why don’t companies hire software engineers who are willing to write code for less money?

People tend to want to be paid market value

Amazing ELI5 on the value CEOs bring to the company.

Only difference: instead of coach Kyle making just _you_ feel great, he's actually running the US Olympic Junior Team and has to hire five or more coaches under him that make _you and your teammates_ feel great and perform well.

That's why CEOs get paid well: their impact has a much wider scope.

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