CEO should exist, and it's normal that their compensation is the highest of the company.
However it shouldn't be a 268 to 1 ratio with the median worker like the SP500 average. There is no way the CEO is worth that much money to the company.
I disagree (not a CEO). What’s the median worker at a company like Walmart or Amazon paid? To think that a CEO of those couldn’t improve (or degrade) the company’s performance by many thousand times more than a Walmart or Amazon worker seems strange to me. They’re paying them to not make those companies into Sears or J.C.Penney.
Investors (and the boards they hire) pay CEOs for results. That range of results is very wide for large companies.
A mix of bad CEOs at those companies and good CEOs at Target, Walmart, and Amazon. I don't believe the median worker held any blame at those companies.
From that, I’d conclude that CEO capability and effectiveness really matters and paying up for a good one is worth it.
That is a false binary. It's also plausible that those individuals had as much effect on important outcomes as the guy at the front of a marching band does on the music, with other factors making the difference.
Also possible is that the CEOs grossly overcentralized the companies such that they increased the apparent importance of CEO decisions and then just took some big gambles. Heads they get paid a lot of money; tails their bets pay off and they get hailed as geniuses who get paid even more money.
At a very large company, I think some individual decisions the CEO makes will have much more impact on the company than the work output of 268 employees. I think some CEOs really are probably worth that kind of money. People like Steve Jobs.
However, most ceos aren’t genius superstars. And I don’t think CEO pay really makes sense given supply and demand. I think there’s plenty of people who could do at least as good a job as many CEOs do, and would happily do so for a lot less money.
I suspect a lot of CEO pay is an arse-covering exercise by the board. If the board hires a super expensive CEO, and that person turns out to be terrible, the board can say they did everything they could do to get the best ceo. But if the board hires someone for much less money who turns out to be a turkey, they might be blamed for cheaping out on the ceo - and thus the company’s downfall is their fault.
Is the Mozilla CEO really so amazing at their job that they deserve such insane compensation? I doubt it. I bet there’s dozens of people at Mozilla today who are probably smart enough to do a great job as CEO. They just won’t be considered for the role for stupid reasons.