The talent factor can’t be overlooked. As society continues to debate the merits of high executive pay, I think we need to be honest with ourselves about the nature of talent. Ability is not distributed equally among us. Some people have unique talents that are in high demand, and those talents earn them big rewards.

Few people can perform like Bono, write like Harry Potter’s J.K. Rowling, or golf like Tiger Woods. They have unique talents the free market has decided are worth millions of dollars each year, even though Woods doesn’t win every Major and every album of U2’s isn’t double platinum. Yes, they drive product sales and ad revenue, and in many cases, spearhead major philanthropic initiatives. Yet, like CEO’s, their compensation is usually established long before the success (or failure) is obvious — Nike signed Woods years before he donned a green jacket.

Likewise, only a handful of people are capable of leading major multinational corporations with 100,000+ employees and $50+ billion in annual revenue. Bottom line: true stars are in short supply and high demand. It’s pure Economics 101.

Anthony Smith is Co-Founder and a Managing Director of Leadership Research Institute and author ofThe Taboos of Leadership: 10 Secrets No One Will Tell You about Leaders and What They Really Think (Jossey-Bass, May 2007). His forthcoming book is ESPN: The Company (Jossey-Bass, September 2009).