Larry Ribstein used to be NY Times business columnist Gretchen Morgenson’s worst nightmare, but the nightmares receded a bit when Professor Ribstein tired of exposing the vacuous nature of her weekly columns after a year or so. Nevertheless, Morgenson’s nightmare has not gone away completely:

[Kevin J.] Murphy and [Jan] Zaojnik attribute the rise in the relative value of managerial ability to a variety of factors. Most interestingly, these include the need for public relations skills in dealing with external constituencies and increased media coverage. Other factors include the need to be conversant with other disciplines — economics, management science, accounting, finance. The authors argue that firm-specific skills are becoming less important because data are no longer “buried in the bowels of the organization,” but are easily accessible by computers.
The authors conclude that the importance of general rather than firm-specific human capital means that:

CEOs can capture the whole marginal product created by their transferable ability, but the lack of alternative use for their firm-specific skills means that they can only extract a fraction of the rents created by this part of their human capital. Therefore, a shift in the relative importance of general managerial ability will lead to higher wages even if overall managerial marginal productivity declines.

. . .Most importantly, I love the irony here. Murphy and Zaojnik are saying that part of what is driving executive pay up is the skill in dealing with Gretchen Morgenson and her ilk ñ the very people who are complaining about that pay.

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