Many people are upset with executive compensation but in reality there are some bad apples that ruin it for the bunch. Many chief executives are brought into companies in order to help turn them around and they are often worth the price. Others have been with the company for many years and have unparalleled knowledge about the company and are often worth the price as well. It’s the underperforming chief executives that promise turnarounds or others who are installed as part of a family business and shield themselves with poison pills that cause the problems.

There is often insufficient objectivity in many board rooms, but board members do not necessarily approve a lucrative package out of friendship. Rather, they understand how hard and risky the post can be and recommend pay accordingly. There is also a lot of pressure from outside investors these days for performance that can make the chief executive post more difficult than ever before. So, before you criticize the practice as a whole, it may be a good idea to take a look at it from a case by case basis.