So the CEO is the face of the company, and companies are willing to pay a lot for a face that projects a certain image? If that's the case, then couldn't you argue that it's worth a lot for the company to pay to improve its brand image?
It's worth a lot to the shareholders to manipulate the stock price upwards, that's of no benefit to the customers though. Quite the contrary, choosing executives based on how well they sell equity opposed to how well they can operate a company produces worse results for the market (of goods/services, not of capital -- that's the distinction).
You're confusing the market for equity with the market for the goods and services produced by the company. The shareholders are optimizing for the former at the expense of the latter.
