As a general observation, executive salaries in the US are outrageous. Executives justify these exorbitant salaries arguing that they are necessary to attract top executive talent. I call BS. Consider the following:
1. Executives in other other developed countries are paid substantially less on average than corresponding executives in the US, both in absolute terms and relative to the compensation of rank and file workers. Are the former really that much better than the latter? I doubt it.
2. Executives in the US receive high compensation regardless of actual performance, and when they are let go, they inevitably receive very, very generous golden parachutes. There does not appear to be a strong correlation between pay and performance (at least from casual observation).
3. What is the executive's opportunity cost? You mean if the CEO of a corporation was being paid $15,000,000, instead of $30,000,000 he'd go do something else? What else would he do where he could possibly make this much money?
4. Corporations stack their Boards with cronies and high executives from other corporations . Boards are incestuous bodies whose members have the incentive to perpetuate the system of excessive executive pay, because they all benefit from it. Thus the very governance body that might otherwise act as a check on executive pay and possibly align pay with actual performance, has been co-opted to serve the interests of the executive class over that of other corporation stakeholders, and particularly the rank and file.
