Under the assumption that the larger firms will have most to benefit from hiring the best managers, the pay levels of these individuals across firms will be determined by distributions of firm size and managerial talent. In such a context the value of the highest talent may be significant for the largest firm. In similar spirit, Gabaix and Landier (2008) suggested that even very small ability differences can have large impacts on firm value. They found the sixfold increase of U.S. CEO pay between 1980 and 2003 can be fully attributed to the sixfold increase in market capitalization of large companies during that period.