CEO salaries - are they justified?

Sometimes, over lunch we have interesting, free wheeling and midly conterversial discussions. The other day the topic of discussion was the Bush's plan to privatize social security and general economic/ immigration trends. And, the people in the discussion include a Romanian who is now US citizen, a Russian, a Chinese who is a US citizen, an American of Pakistani descent born in Canada, an American from the midwest and me.

The Romanian was all for the privatization of social security and proposed that the government cut back all funding for social causes. Of course, she is also married to a dude who hunts "game" (which, i think is lame. I mean how many of the deers carry guns and know how to shoot.) and drives a truck. You get the picture. As we started talking about whether we need government to fund social programs and upliftment of the down trodden, we started discussing outsourcing/ offshoring and the problem with run away CEO salaries.

I was of the opinion that Wall Street is very short sighted and it rewards CEOs who indulge in short term thinking. And, CEOs (actually, all C level folks) are becoming short sighted - they outsource / offshore to reduce costs without seeing if the process has waste and is flawed. And, I brought up the issue of CEO salaries. In my case, I earn 1/4th of my boss, who earns 1/3rd of his boss and this person earns 1/3rd of the CEO. So, in effect I earn less than 1/30th of my CEO. And, our CEO is by no means raking it and I am a mid-senior manager level. So, my question was - is this multiplier at each level justified? And, why is it that in Europe the pay at the C level is far less.

Of course, the Romanian's reaction was - "How do you know the CEO salaries? I think this is all false". Ah! classic republican. The pakistani-american's reaction was that this allows US to attract better talent. By virtue of what he said he was saying all CEOs work for money and all American company CEOs are smarter than the rest. Interstingly, the other three felt that this is something worth looking into and addressing.

In meantime, jobs get whacked/outsourced/offshored and CEO pay goes thru' the roof (I believe the new multiplier is 350+. Or, the average salary of US CEO is 350 times that of the average worker. This is according to Businessweek.) and Wall Street is only interested in the numbers for the next Q.