Should the Top Executives of the Major Banks That Received Bailout
- Submitted by: summer1836
- Views: 947
- Category: Politics: Economics
- Date Submitted: 10/29/2010 10:44 PM
- Pages: 4
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Should the top executives of the major banks that received bailout money be allowed to receive large bonuses?
Corporations have come to rely on executive compensation packages to attract and retain a CEO or top executive. Compensation packages usually consist of retirement benefits, incentive plans, and gains from stock options, while including perks such as use of the corporate jet, a chauffeured limousine, health insurance, and membership to elite country clubs. Benefits that often paid out after employment with the organization have ended. Payouts or severance agreements are even included in the packages if organizations release some executives. For example, Steven J. Ross, co-chairman of Time Warner walked away with 1.4 million dollars after he were terminated for poor performance. Excessive Executive Bonuses often require wage cuts, downsizing, and restructuring in order for the organizations to remain competitive in the marketplace.
After a large bonus pay out, organizations have gone to the extent of declaring bankruptcy to stay afloat. All while the average hardworking employee suffers. Therefore, is it not ethical for executives to receive excessive bonuses, payouts, benefits, or golden parachutes while the banks and employees are struggling to survive?
Several years ago anyone who wanted to live the “American Dream’ could. Banks were lending money based on no income verification loans, stated income loans and even no documentation loans. This was great for everyone for the first few years until the loans all turned into an adjustable rate mortgage and everyone’s payments doubled. This created a financial crisis and raised the number of foreclosures in America tremendously.
The financial crisis caused a large number of Americans to lose their homes, jobs and the “American Dream.” The combination of the real estate market, banking industry, automotive industry, the war in Iraq and all other negative aspects of the crisis all...
Corporations have come to rely on executive compensation packages to attract and retain a CEO or top executive. Compensation packages usually consist of retirement benefits, incentive plans, and gains from stock options, while including perks such as use of the corporate jet, a chauffeured limousine, health insurance, and membership to elite country clubs. Benefits that often paid out after employment with the organization have ended. Payouts or severance agreements are even included in the packages if organizations release some executives. For example, Steven J. Ross, co-chairman of Time Warner walked away with 1.4 million dollars after he were terminated for poor performance. Excessive Executive Bonuses often require wage cuts, downsizing, and restructuring in order for the organizations to remain competitive in the marketplace.
After a large bonus pay out, organizations have gone to the extent of declaring bankruptcy to stay afloat. All while the average hardworking employee suffers. Therefore, is it not ethical for executives to receive excessive bonuses, payouts, benefits, or golden parachutes while the banks and employees are struggling to survive?
Several years ago anyone who wanted to live the “American Dream’ could. Banks were lending money based on no income verification loans, stated income loans and even no documentation loans. This was great for everyone for the first few years until the loans all turned into an adjustable rate mortgage and everyone’s payments doubled. This created a financial crisis and raised the number of foreclosures in America tremendously.
The financial crisis caused a large number of Americans to lose their homes, jobs and the “American Dream.” The combination of the real estate market, banking industry, automotive industry, the war in Iraq and all other negative aspects of the crisis all...