In a recent editorial in The Wall Street Journal, former Secretary of Labor Robert Reich made the case that CEOs deserve their pay -- The typical CEO of a Fortune 500 company earns more than 364 times the pay of the average employee, up more than 10-fold from the ratio forty years ago.

Reich argues, compellingly, that American business is more competitive now than it used to be, and the CEO is more important than he or she was back then: "The CEO of a big corporation 40 years ago was mostly a bureaucrat in charge of a large, high-volume production system whose rules were standardized and whose competitors were docile... The CEO of a modern company is in a different situation. Oligopolies are mostly gone and entry barriers are low. Rivals are impinging all the time -- threatening to lure away consumers all too willing to be lured away, and threatening to hijack investors eager to jump ship at the slightest hint of an upturn in a rival's share price."

Reich may be right that, on average, CEOs aren't wildly overpaid. But I'm reminded of an interview I saw with Hall of Fame baseball player Carlton Fisk a few years ago, who was asked whether he resented how much better-paid players were today. He replied that it didn't bother him that the superstars were making $10 million or more -- What bothered Mr. Fisk was that very ordinary players were making $500 thousand per year and more.

We may be in a similar situation in corporate America. I would argue that the top CEOs, who really do generate considerable value for shareholders, are not overpaid. A CEO who, to use Reich's words, is " sufficiently clever, ruthless and driven to find and pull the levers that will deliver competitive advantage", is worth every penny. The problem is that even a mediocre CEO at a large company generally commands a pay package in the mid- to high-seven figures. That isn't pay for performance; it's pay for a warm body.

Whether CEO pay is high or low on average is sort of beside the point. What we have is a corporate governance breakdown where, in many cases, executives are compensated in a manner that is completely independent of the value they generate. Former Home Depot (NYSE: HD) CEO Robert Nardelli says hello.

The issue of executive compensation shouldn't be looked at as class warfare or a political issue. It should be looked at as a corporate governance one.