I don't know how to value a CEO, but it is clear that a good CEO makes a big difference.
Somewhat ironically, if it was obvious what made for good CEO performance, they wouldn't be expensive.
Also: whatever happened to working for passion and love of the job? Or does that only apply to the lower ranks?
"gotcha" arguments like these only work if you assume the other side is some sort of monolith that both believe CEO should be highly paid and that employees should be driven by passion. Both might vaguely be pro-business, but by no means does one imply the other, and therefore makes for a strawman.
Their valuation is based on the future growth of the company, so while profit today matters, what matters more is increases in revenue and hitting or exceeding your guidance. Look at amazon's recent 20% tumble, it was all driven by not increasing revenue. Amazon increased it's profits just fine through cost cutting, was more profitable than ever, but missed the expected growth in revenue by half a billion dollars and it cratered.
Driven people will work hard regardless, and in leadership, the right kind of leaders will work mainly for the reputation, fulfillment from a job well done, people elevated, legacy, etc - and a respectful level of comp. The narcissists, grifters and mercenaries maybe need the $$$$$.
Edit: I should clarify I mean high tax rates on the wealthy.
The argument is that good leaders are usually driven by things other than a huge salary, and so long as the salary isn't an insult, will do what they do.
So why offer huge salaries to CEOs? It just attracts the kind of leaders that only care for the money.
Not everybody is driven by work. Many people are driving by the things they can get from work. The mythical rational man would eventually see that hard work isn't worth the toys anymore and so will start finding something cheaper to spend money on. You need to eat, but you can eat "beef and caviar", or "rice and beans" - at very different prices.
They might be still CEOs even if they get paid $1, but all things being equal, they'll still go for the higher paying job. What happens if you have a competent CEO and your competitor decides to poach him? This happens all the time. Starbucks recently poached Chipotle's CEO. Given the different trajectories in stock price between chipotle and starbucks, the incoming CEO is arguably more competent. The market seems to agree[1]. If you pay your CEOs $1, it's only a matter of time before your competitor poaches him and you're left with a worse CEO.
[1] https://www.economist.com/cdn-cgi/image/width=1424,quality=8...
Free markets run rampant when they are not properly harnessed to the common good, and this is surely a case where they should be harnessed.
This is empirically not true.
Were c-suite execs less competent before the 90s when executive pay regulations were repealed?
Also, your argument cuts exactly into your own fingers when considering employee pay.
That's not what strawman means. I mentioned an objection with paying CEOs less, but there's no implication that's the other side's argument. If that counts as strawmanning, what you're doing is arguably strawmanning as well.
>Were c-suite execs less competent before the 90s when executive pay regulations were repealed?
What regulations are you talking about?
Also, I'm not sure how you got the impression that high pay causes good performance. Clearly paying a monkey $10M isn't going to magically make him a competent CEO. However, there are good CEOs and bad CEOs out there. Microeconomics dictates that firms will bid up their salaries, causing the more competent CEOs to be paid more. If there are regulations on executive salaries, of course that's going to lower the price, by definition. The same would apply if government capped the salaries of software engineers. That doesn't mean there wouldn't be competition between firms, it'll just get shifted to non-financial compensation eg. company cars or whatever.