Overpaying CEOs

It’s difficult to overpay the truly extraordinary CEO of a giant enterprise. But this species is rare. Too often, executive compensation in the United States is ridiculously out of line with performance. That won’t change, moreover, because the deck is stacked against investors when it comes to the CEO’s pay. The upshot is that a mediocre-or-worse CEO—aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet, and Bingo—all too often receives gobs of money from an ill-designed compensation arrangement.