No risks. None at all.

The point here is that someone's money is used to earn more money. And the proportion NOT shared with the investors is used to pay exorbitant provisions to people who are NOT so special to earn them. If he earned half, more money would go to the original investors, and he'd still be overpaid.

Long term, such payment strategies draw smart, dedicated people away from important jobs. I see it in science and education: too many people consider them intolerably underpaid professions, and avoid them. And that is a negative net result for society.

As a guy who works for a big boss with salary about 20-fold higher than mine, I really could not care less. I'm normally working my ass off up until I lost the job while he mostly chats and sits in the office reading and making decisions. I guess, you have to make the right kind of decisions to get higher paychecks. BTW, this was not a company but state university.

wow!

OK, Professors here earn a lot compared to the research assistants who do all the work, but 20 fold?????

I am (were) faculty as well and actually, my paycheck was quite decent for state university and compared to other people with same type of appointment.

I know a man, 70 years old, who already knew during his studies that he could become professor and has been so until he became a member of parliament* till his retirement. He never wrote a single application letter in his life. He's a good man, undoubtly a good professor but definitely a great politician, and I grand it to him. But I'm also glad that nowadays it doesn't come to people so easily anymore. This man had luck by coming from a 'proper' environment. So there have been major improvements on this unfairness. Yet of course, no country is the same...

*: by which his salary dropped from approximately ƒ160,000 to ƒ100,000 (i.e. ~€75,000 and €45,000).

Random thoughts:

- Matrix: Your first post mangles two things: The question: Shuld it be that way? and Should there be a law against it? (I guess, Killer mainly wanted an answer to the first question, but you answered the second)

- Totally free markets don't work (as well as communist markets), so the best thing should be something in between

- The governemnt has to act different than a company, keeping the whole thing in mind (sadly, the governemtn applies logic of a company too often, e.g. it is better if the government spends money when there is a crisis and vice versa, unlike a company where it is normally the other way round)

- If something is harmful to the whole economy, then there should be a law against it (simplified): If the banks (that aren't like other companies as the state might need to rescue them if they fail) tend to give incentives to their people taking high risks, then there should be a regulation against that

- If people working full time can't make a living of that, then something is wrong (and this is not good for the economy as such either: somebody needs to be able to buy the stuff that the companies want to sell)

Comparing salaries of the bosses to the simple workers needs to consider two things (besides many more...)
- The salary of the boss must be high enough (relative to the simple worker) s.t. you create incentives for trying to reach that position as well (and thus often working harder or better)
- If the salary of the bosses is too high compared to the workers, then the workers might be frustrated and therefore don't work as good as they might do (as they might get the feeling that all their power only helps other people)

In the end the CEOs are also only simple workers to the shareholders. If somebody owning a company earns very much if the company is well, then I don't see any problem with that.(but that's not a salary then anyway)

Also consider that corporate and state employment ethics is different in the USA. Europe is more on the socialist side of the things IMO. In the USA, you are never supposed to know the salary of any people around. Of course, eventually with time, you get to know things. Otherwise, it is all absolutely confidential ideally. Another thing is that people do not normally stay in one place for too long. It all depends and this is very general. However, in state universities at least in Texas, salaries of top management and top researchers are sometimes public and having a presedent or chancellor with $1 mil paycheck is not that uncommon. Considering that a good neurosurgeon or good heart transplant surgeon can earn $2 mil, it is not something very unusual. I guess people take it easy there.