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[quote=Anonymous]CEO pay is incestuous.  It has nothing to do with the need to attract talent.  As a few others have pointed out, CEOs sit on each others' boards.  There is a compensation committee but members' incentives are to keep jacking up pay.  The board members on this committee have a self-interest in keeping the CEO's pay up because that raises the average CEO pay for everyone else, including themselves.

The committees bring in executive compensation consultants to make it look like a disinterested party was involved but all the consultants really do is benchmark all the CEOs' pay and then say whether the compensation fits in the range, which creeps ever upward because almost every single person on any corporate board will personally benefit if the CEO of this company gets paid more.

It is a type of corporate price collusion, which in other contexts is illegal.  And so pay spirals ever upward without anyone asking is this person worth it.

In theory shareholders should hold the line, but ultimately CEO pay is a small amount of total expenses so they are willing to overlook it as long as the CEO does a decent enough job hitting quarterly numbers.  This has become the objective of almost every corporation due to the misguided belief that shareholder value is maximized by hitting those numbers instead of the company building long term value over a much longer horizon.  This idea, and the corresponding huge leaps in executive pay, are a fairly recent phenomenon and can be fixed.

These two articles were posted recently in the Politics forum and are worth a read:

https://www.forbes.com/sites/stevedenning/2017/07/17/making-sense-of-shareholder-value-the-worlds-dumbest-idea/#3492332d2a7e

https://www.forbes.com/sites/stevedenning/2018/07/26/how-to-fix-stagnant-wages-dump-the-worlds-dumbest-idea/#3e7320a91abc[/quote]

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