I think it's a bit of systemic mistrust rather than any underhanded plan. The owner is worried about what he sees as a high salary and wants to bake in some accountability.
Truth isn't a binary, it's a gradient. There's both rational and emotional truth in many things we label wrong or unjust.
Meanwhile, we evolved to sift through information rapidly towards self-preservation. This has obvious drawbacks like any other broad algorithm would. Let's not get proud of whatever cohort we identify with; logical fallacies are the norm at any level of intelligence.
Many of our truths conflict with other societal and even personal truths. You can want children with a loving wife and still find pleasure in extramarital affairs. Both have sound biological and psychological rewards that carry paradoxically self-sabotaging complications.
Add to that cultural and technological shifts, disparities in wealth and power, the weakness of language, and many other complications which won't fit into the box I'm typing in.
Truth is complicated and dynamic enough as a philosophical concept, let alone with the innate irrationality we all share.
In context of CTO-level work, pay-for-performance would also seem to encourage meeting reward goals at the expense of a thousand other unmeasured tasks.