"That's because their boards of directors are yes-men who don't say, "No, actually that's not true, let's look at the paperwork, let's look at and see what the returns are,'" he said. "The ability to be self-delusional, in an environment where you're the boss, is unmatched."
Whether deserved or not, economist Dan Mitchell of the libertarian Cato Institute said good and bad CEOs must be paid because contracts are binding.
"A contract is a contract, and one of the differences between a civilized society and a banana republic is that the rule of law is enforced," he said.
"It's only our job to get outraged if we're shareholders," Mitchell said. "And if we don't like the way that General Motors or any other company in the country's being run, buy shares, go to the annual meetings, raise a stink … but do not stick your nose in somebody else's business."
Now that Congress is using taxpayer dollars to bail out failing companies, government bureaucrats -- not corporate boards -- want a say about what a CEO is worth, which troubles Mitchell.
"It may very well be that Company A is the most incompetently run company in the world, but I know one group that'll do a worse job," he said. "And that's the 435 members of the U.S. House of Representatives and the 100 members of the U.S. Senate."