NEW YORK, Aug 15 (Digital Digest Breakingviews) – CEO compensation is often influenced by intangible factors. Determining what constitutes excessive pay largely depends on the perspective of the evaluator and the comparison metrics used. Take Starbucks (SBUX.O) as an example. The company is offering its new CEO, Brian Niccol, a compensation package potentially worth $145 million, which might appear as indulgent as a venti caramel ribbon crunch Frappuccino.

Niccol has the challenging task of revitalizing a $100 billion coffee chain currently facing a decline in sales. As expected, his compensation is substantial. It includes an $8.8 million cash bonus if both he and the company surpass certain performance goals. Additionally, he receives $85 million merely for joining the company, primarily to offset the stock awards he forfeits by leaving his role as CEO of Chipotle Mexican Grill (CMG.N).

Niccol also stands to earn a share-based bonus: $23 million annually if he meets his targets. If he exceeds expectations, Starbucks could potentially triple 60% of that amount, raising it to $51 million, provided the awards are structured similarly to this year’s long-term executive bonuses. These bonuses are designed to increase if objectives such as sustainability and talent retention are achieved, as outlined in the company’s annual proxy filing. Additionally, his replacement stock award could multiply under specific conditions.

Would such a significant payout really be seen as excessive? A barista might think so, given that the amount is about 10,000 times the median earnings of a typical Starbucks employee. Moreover, unlike most of his subordinates, Niccol enjoys the luxury of working from a remote office in sunny Newport Beach, California.

However, to a Starbucks shareholder, Niccol could be seen as undercompensated. The company’s market capitalization surged by $20 billion after his appointment was announced, meaning he has already delivered over 130 times his value. From another perspective, analysts predict that Starbucks will generate $4.4 billion in earnings next year, according to Visible Alpha; if Niccol boosts that to $4.6 billion, he’ll have justified his compensation.

Ultimately, Niccol’s pay is closely tied to his performance and his commitment to the role, due to the restricted stock components. Excluding the sign-on bonuses and assuming he merely meets his targets, his $28 million annual compensation would barely place him among the top 100 highest-paid U.S. CEOs, according to the AFL-CIO union federation’s list.

The reality is that CEO pay is highly subjective. There’s no U.S. law capping it, nor is one expected in the near future. While shareholders have a voice in the matter, it’s largely advisory, and there’s no precise formula to determine what is appropriate. It’s no surprise, then, that CEO compensation continues to rise like whipped cream on a decadent iced mocha.

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