For a number of reasons I took down yesterday's second post for editing. I will repost later.
In a comment on Weariness with competition and the search for efficiency, KVD suggested Icarus and Phoenix: Crash and Burn as a title for a book on modern corporate management approaches. I like that.
Thinking further on the senior executive salary issue, when I first became a consultant, I was interested in varying charge rates and the relationship between those and client type and size. In simple terms, bigger clients were able and prepared to pay more per hour because the absolute size of the expected gain was higher. The same things applies with executive salaries.
High CEO salaries are usually justified on the grounds that they are market determined. At one level, that's true. Remuneration committees sit down and look at equivalent remuneration packages and then set a package level expected to attract/retain the right person. Where a candidate is especially desired, a premium is paid. This creates the CEO salary equivalent of bracket-creep, for that higher salary is then incorporated into market data used to determine later CEO salaries. Those higher CEO packages then cascade down into adjustments to the salaries of senior executives.
From what I have seen, companies that promote internally are somewhat less prone to salary inflation because they don't have the same need to pay a premium to attract the perceived good outside candidate. To my knowledge, I stand to be corrected, there is no statistically significant positive correlation between company performance and higher salary levels after adjusting for industry type. Indeed, the work done by American management writer Jim Collins suggests the opposite. Consistently high performing companies tend to have higher rates of internal promotion and somewhat lower remuneration packages than their less successful rivals.
If you think about it, that makes sense. Very successful companies are generally places where people want to work. They don't need to pay the same individual price premium as their somewhat less successful rivals. They certainly don't feel the same need for high profile silver bullet style CEOs.