I think that if it was my business, I would prefer to hire a good CEO, instead of a star, and use the rest of the money to hire one hundred talented CEO assistants with different expertises. Sounds like a better investment.
Lets assume that CEO can fuck up so bad that it will bancrupt a company.
Star CEO has 0,1% chance of fuck up/year.
Good CEO has 0,2% chance.
And completely mediocre would be about 0,4%.
Hire three mediocre dudes to CEO the company so that they are always deciding on everything together. You have now 0,064% yearly chance of bancrupty, while you can easily pay them just 300k each.
It seems like high CEO pay is often a result of CEO holding the company as hostage. Not not necessarily conciously, but from shareowners point of view. Distribute the risk of bad moves and you should get OK performance cheaply.
CEO is just a human. With about 16 wake hours per day.
When company get's big enough, the role of CEO gets more and more about enabling the employees to create value. Consistency is valuable on it's own right. And it increases as company gets bigger.
Companies typically have board to put a degree of democracy in the big moves. So that mistakes get unlikely as 10 people are not very likely to do the same mistake at the same time. But they are not part of day to day operations, so they usually suffer from lack of data.
