Because you like living in Switzerland, you love what you do, you make generous compensation and you add value to the company. Quite simple, actually.
Assume minimum wage of $7.25/hr, equivalent full-time salary of $14,500/yr. You're the CEO of a firm doing labor-intensive business, with a large number of minimum-wage employees and low-ish profit margins (they tend to go together) so that raising wages would mean swift bankruptcy. Your maximum salary is now $174,000. Which is not a bad rate of pay, but it's not a really really good rate of pay. Heck, I've made that much before (2010, when the market un-crashed and my stock options were actually worth money).
You used to make more, so you own your little chalet, and you've got a nest egg of $4.5 million. You make about $175k/yr off the stock market alone.
You love what you do... but do you love it more than a full-time job skiing in the Swiss Alps and living off savings?
Lidl (a chain of deep-discount stores) recently ran a campaign touting their new minimum of CHF 4'000 per month. Some smaller businesses are a bit below that, but you'd be hard pressed to find a position below CHF 3'500.
At half a million per year, I'm confident I could make ends meet.
It doesn't compute. Obviously the company believes the higher paid individual brings more value to the company.
Because the system of executive pay is self-serving and broken. See http://www.economist.com/node/2121856.