A mix of bad CEOs at those companies and good CEOs at Target, Walmart, and Amazon. I don't believe the median worker held any blame at those companies.
From that, I’d conclude that CEO capability and effectiveness really matters and paying up for a good one is worth it.
That is a false binary. It's also plausible that those individuals had as much effect on important outcomes as the guy at the front of a marching band does on the music, with other factors making the difference.
Also possible is that the CEOs grossly overcentralized the companies such that they increased the apparent importance of CEO decisions and then just took some big gambles. Heads they get paid a lot of money; tails their bets pay off and they get hailed as geniuses who get paid even more money.
Guess who turned Sears and J.C. Penny into what they are today?