Whereas on the other end its kinda a no-brainer that the McDonalds CEO is paid significantly more than the average fry cook... like come-on. Again a reason I am never going back. This city is a piece of shit. Good luck with the exodus.
FIW, Quite a few economists have looked into this, and there is at best no, and at worst an inverse, correlation between value creation and CEO pay. Some of the highest-paid CEOs in America head slow-growth or even unprofitable companies.
If he produces more than 100x the value that others produce, it's perfectly ok.
Nadella and Steve Jobs are obvious examples of the tremendous value a CEO can bring.
Why not?
in the usual economic sense, you keep paying until it hits the exact costs, you don't pay too much and you don't pay too little.
Now lets think of a two kind of counter factual worlds and think of which is worse for the firm.
1. CEO disappears from the company, that marginal benefit is lost and the costs disappear.
2. Where a "Low Level" employee disappears.
I don't know the answer for which one is worse for the firm, but World 2 sort of actually happened when Corona started. "low level" employees with very little costs started to disappear and it turns out the value of these employees was much more than their costs - as shown by how badly the economy tanked from these people not being able to work. That is, it seems the value these employees bring is quite high compared to their costs... yet for some reason they are paid much less. And from just a general economic sense, that seems not okay to pay too little.
Most of the arguments against high CEO wages seem to completely forget about the capitalism we live in. I do not think the current system is the perfect, but for better or worse, the rules are relatively simple. To say that CEOs earn too much is a sign of double standards.
CEOs are chosen by private companies using their hard earned money from a market of CEOs governed by supply and demand. Companies are always out to cut costs, and that applies to CEOs.
You may not find it morally sound, but to blankly say "CEOs have to earn X amount" is really hypocritical.