Jerry Useem ‘93 has an article on (excessive) CEO pay. He notes that :

If the market for CEO talent is based on artificial scarcity, it also suffers from a serious information problem. For a winner-take-all society to work, you need a reliable way of knowing who the winners are. In baseball that’s easy: A player cannot claim to have hit 60 home runs last season when, in fact, he hit 16. In the movies, there’s the incorruptible accountant of box-office returns. In business, however, it’s remarkably difficult to assess how much an executive has contributed to an organization’s success — which, after all, depends on a host of external factors and the input of hundreds if not thousands of employees.

Williams College, as an institution, probably benefits from excessive pay for CEO’s and other senior executives in business since so many generous alums do so well in the business world.

It is also worth noting that much of what Useem says about CEO pay also applies to the pay of senior executives in academia, as ephblog occasionally points out.