CEOs get paid so much because their job requires top-tier skills, talent, knowledge, and experience.
A Chief Executive Officer (CEO) of a company is in charge of the entire organization and is accountable for its performance, meaning CEOs are normally the highest-paid individuals in a company.
CEOs must provide an extremely high level of talent and skill to produce a strongly performing company. And a company's performance actually has a significant effect on how much a CEO earns each year.
Generally, only about 20% of a CEO's annual compensation comes in the form of a base salary. The rest of their compensation comes in the form of incentives based on company performance. These types of pay often come from bonuses, stock options, and other forms of additional compensation.
The logic behind this pay structure is that if a company is performing well, and the shareholders are earning a lot, then the company's CEO should benefit monetarily.
A CEO's pay also often influences the pay of the rest of the employees of a company. It can be used as a metric to determine all other employee salaries, benefits, and bonuses.
The skills and duties that come with the role of CEO are extreme, and the number of qualified professionals who can fill these roles is very limited, this is why CEOs get paid so much.
