There is a lot of logic in your point, but I am not so sure I go along with it anymore. For one thing, I am aware of CEO’s who got there job primarily because it was believed or negotiated that they would put a lot of their own money into the company. Also, there are CEO’s and other high chiefs that are selected because they are well connected with decision makers that may influence the company’s success (such as government officials, executives at other companies, etc.)

From one standpoint this is all fine. But I believe that too much of this has created a system where the top level folks have reached a position where they can wield too much power and are making it much harder for equally capable or effective people to get into the club. They then go about putting each other on boards to the point that it has become a bit incestuous.

Think about all the really capable people you have known through school and business. Now think about how many of them are on a corporate board or are the officer of a major company. Don’t count people you met AFTER they made it, only people you knew BEFORE they made it. Also, don’t count people whose parents were in this club. I find people either knew many, or almost none.

That tells me that there is a lot more than merit or luck involved. Just my theory. I can’t prove it.

From your own link, the footnote on Hiorshi Okudo’s salary figure:

In some cases…the CEO’s pay is lumped together with that of the management board, meaning that we estimated the top guy’s pay based on the aggregate figure.

Oops. Sorry, but this is like saying Steve Jobs really only pulls down the $1 a year Apple officially pays him. Companies are bidding for executives in a competitive market, and as you point out, how are you or I any more qualified to estimate their value any better than the people doing the hiring, who have every incentive to save as much money as possible. I don’t know much about the peculiarities of the Japanese market for executives, but I know that companies in Japan are notorious for basically guaranteeing lifetime employment once you make it to a certain seniority, and that high level executives are therefore extremely likely to come from within the company, leading to much less cross-firm competition.

Pity the fools that buy stock in the American big 2…….pity on me.

I have no issue with pay for performance. Pay Mulally $1-million a year now, which is more than Toyota pays Okudo, with the balance due if and when he delivers the $10-billion to Ford shareholders.

According to this link, Hiorshi Okudo receives $930k per year, with Toyota’s market cap at $130b.

In contrast, Mulally made $25m plus in his first year, Rick Wagoner pulled down $10.2m (plus a bankruptcy proof pension and bennies), etc.

But the funny thing is, if Mulally IS worth what he makes, it’s only because all the other FoMoCo execs are not. Because if they WERE worth what they get paid, Mulally’s miracle wouldn’t be needed.

Well-placed insiders are looting companies. Shareholders, employees and ultimately the taxpayers when government bails out the lenders are the fall guys.

If you owe a bank $1-million and can’t repay you’re in trouble. If you owe the banks $100-million and can’t repay they’re in trouble. If you owe the banks $100-billion and can’t repay, we’re all in trouble.

The people who own the car companies hire people who can deal with the unions and the regulators and all the other potentates with an agenda. They hire people who are good at getting the job, but not necessarily so good at getting anything done. This is possible because the actual stock holders are far removed from the process. Much more removed than the unions, the government, and other people with an agenda.