$1mm/year is such a drop in the bucket for a company making $100,00mm/year it almost doesn’t matter.
It’s not about the marginal benefits of paying the same guy just a tiny bit more anyhow, it’s about paying that guy enough that he doesn’t just decide to retire, or run a competing company, or start his own. Imagine if you think some guy is the most qualified person in the world to run your company, even if they only do a 1% better job growing revenue than the second best or “average”, when your revenue is measured in the hundreds of billions it’s easy to justify paying them such huge quantities of money.
The answer is actually antitrust and to break up Google (and other Tech giants) into smaller pieces. That should lower his compensation by a bit, since his individual power would be lower.
Yes, we would lose some synergies, but we would gain in terms of a more equitable society. Sometimes more stuff is not better.
Right, I understand the justifications for CEO pay. I am just saying that I absolutely do not believe that for large public companies he is 1% better than the second choice.
Google as it grew basically had two tiers of outcomes for insiders. The inner circle of insiders like Sundar and Susan had Google grow “under” them so they stayed near the top. A lot of this inner circle has either retired or left, isn’t fit to run the company (some of the purely technical folks) because of their skills, or was forced out because they did bad controversial things (there’s a joke that Sundar won by default because he was the only one that didn’t try to dip his pen in company ink).
The other early employees and insiders got layered with outside middle management as Google grew.
Since Google is basically controlled by the founders still there are actually very few people left who are qualified on paper to run the company, already work at Google, and have the trust of founders. Now I’m not saying that means nobody could do better than Sundar, but I do think the founders earnestly believe he is 1% better than any second choice.
I mean, nobody has really solved succession planning in any industry, and tech is still quite young. And the markets often guess wrong about which successors will do well. See: Disney and its failure to get a decent successor to Bob Iger
It’s not about the marginal benefits of paying the same guy just a tiny bit more anyhow, it’s about paying that guy enough that he doesn’t just decide to retire, or run a competing company, or start his own. Imagine if you think some guy is the most qualified person in the world to run your company, even if they only do a 1% better job growing revenue than the second best or “average”, when your revenue is measured in the hundreds of billions it’s easy to justify paying them such huge quantities of money.