Though the level of CEO pay compared to average employees is understandable, it is outrageous. CEO pay skyrocketed when companies bought into the academic idea that only shareholders interests mattter. Thus, if executives were incented to reward only shareholders by driving up earnings, and therefore, share price, they would do the right things. Omitted from this overly narrow viewpoint was the relative ease of manipulating earnings, a great temptation to the executives who received shares or options, which are priced at a multiple of earnings.
The conventional distinction between managers and leaders, that managers organize to meet goals, while leaders set (new) goals, is rather artificial. In most organizations, no one can do only one or the other anymore. With managerial responsibilities comes the obligation to be looking for new and better ways of doing things, finding ways to inspire and not just control people, setting direction and not just meeting predetermined objectives. Unfortunately, too much of MBA education inadvertently prepares students for just the managerial side of their responsibilities. There's plenty of