The gap between skyrocketing CEO pay and relatively stagnant compensation for everyone else has been widening for decades. While annual CEO compensation increased by 726.7% between 1978 and 2011, average worker compensation only went up 5.7% during the same time, according to a 2012 study by the Economic Policy Institute.To make the argument that this is efficient you need to really think one of the following:
1) CEO wages were terribly depressed in the early post-war era
2) Markets have changed to allow CEO's to add more value than before
The first seems questionable: we do not think of 1945 to 1978 as a era of desperate stagnation and sub-optimal economic performance. If it was hurting the United States, it was fairly subtle and swamped by other effects.
The second is only more plausible in that modern electronics and communications have made it easier for a CEO to influence policy. But, interestingly, insofar as firms are themselves command economies, this actually suggests that the return to assets on command economies has improved. I won't speculate further except to say that this is an interesting argument for the average free marketer to make.
I suspect the real story is that barriers to entry (i.e. patents, ability to buy out competitors with market capital) are allowing senior people to reward themselves more without hurting the firms ability to compete. Now that is not all bad -- extra resources have done a lot of things throughout history to improve matters, even when inequality is involved. But it does make a mockery of the idea that the market can find the right price or wage in all circumstances.
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