How Well Does The Market Value CEO's?

When JC Penny announced that Ron Johnson was going to be its new CEO its market capitalization increased by $1 billion.  After one and one half years of poor performance under Johnson, its market cap increased by $350 million when it was announced that Johnson would be leaving the company.  When JC Penny announced that the CEO who Johnson had replaced would be rehired its market cap increased by another $700 million.  If we use the stock market as the most efficient way to measure the value of a CEO we would have to explain why it was worth $1 billion to hire Johnson, and worth over $1 billion to fire Johnson and replace him with the CEO who preceded him.  It would appear that the stock market is not an efficient measure of what a CEO is worth to a business.  The market believes that CEO's are capable of rescuing a firm in a bad business and that weak CEO's are responsible for business failure.  They are rarely as important to a firm as the market believes.