Are They Worth It? CEO Pay

Here's what the Economist writes.  Make sure to read the comments.  Here a paper written by the Economic Policy Institute.  This is what I think.

Some CEOs are worth their salary and some are not.  One could make the argument on utilitarian grounds.  Most people think that an action is good if it brings the most good to the most people.  But this doesn't correctly calculate costs and benefits.  Let's say Baxter Bear has a CEO salary of $200 while Barney Beagle and his fellow workers have a salary of $1.

Who is to say that both get the same benefit from their pay?  Baxter might get a small amount of benefit while Barney and his co workers get a huge benefit.  Adding up the workers' benefit might be greater than Baxter's.

If Barney Beagle is worth more pay, why doesn't Barney quit and find a higher paying job?  One possible reason is that Barney is being paid his marginal product.

I believe that when you go to work for a company, you either explicitly or implicitly sign a contract that is voluntary.  No where does this contract say that consideration has to be equal.  Since you voluntarily sign the contract, you agree to the wage disparity.  If you don't like the salary structure, don't work there.

Do CEOs owe something to the society that they draw their pay from?  Probably.  I don't know how much is given back by high paid CEOs.  I know where I live, it is huge.

The CEO argument goes back to philosophy.  People think a just society is one that is equal.  But as Nobel Economist, Amartya Sen what said, "Equality of what?"  To have income equality means that their will be inequality of something else, perhaps human rights.  And this is why I say you have the freedom to choose where you work.