Steven Kaplan finds that your average large-company CEO has, historically, received a little more money personally than the average household in the top 0.1%. And he finds that, surprisingly, this does not hold true for the past decade and a half. Over the past decade and a half large-company CEOs have received more than double their standard ratio to the rest of the top 0.1%:
So why, then, do Steve Kaplan and Joseph Ruah write that CEOs are riding the tide of:
technological change, particularly in information and communications, [which] can increase the relative productivity of highly talented individuals, or “superstars”… [as they] become able to manage or to perform on a larger scale, applying their talent to greater pools of resources and reaching larger numbers of people…. Other explanations of the rise in inequality have been offered… managerial power has increased… social norms against higher pay levels have broken down… tax policy affects the distribution of surplus…. We believe that the US evidence on income and wealth shares for the top 1 percent is most consistent with a “superstar”-style explanation rooted in the importance of scale and skill-biased technological change… less consistent with an argument that the gains to the top 1 percent are rooted in greater managerial power or changes in social norms about what managers should earn
Yes, there is a superstar economy--of entertainers like Oprah Winfrey and J.K. Rowling, and of entrepreneurial visionaries like Steve Jobs and Sam Walton. But what has this to do with the career ladder-climbing heads of large bureaucracies? The CEO pay fact looks to be broadly separate from the superstar economy fact, which looks to be broadly separate from the education premium fact.