Should The Top Executives Of The Major Banks That Received Bailout

886 words - 4 pages

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, ...view middle of the document...

It is difficult to understand how Merrill Lynch CEO, John Thain, spent over $1.2 million dollars of company money to redecorate his office. He also paid out between $3 and 4 million dollars in bonuses to top executives, all while the company was severely struggling and in the process of being sold to Bank of America. (Chuchmach, & Rood, 2009)
The main contributor to the whole economic fiasco was be poor decisions made by top AIG officials. Just after receiving the first $85 billion of bailout money to save their business and possibly the world economy, top executives enjoyed an exclusive, all expenses paid retreat at a resort in California. AIG allegedly spent $440,000 for its executives, $200,000 for rooms, $150,000 for meals and $23,000 for the spa. (Sullivan 2008)Another poor decision that appears to have been made by top officials at AIG is paying back their top trading partners at 100% on the dollar. The problem is that those partners (Goldman, Bank of America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley, Deutsche Bank, Barclays, and more) were already receiving bailout money from the government called TARP (Troubled Asset Relief Program). (Spitzer 2009) For example, an incredible amount of the $12.9 billion of taxpayer money went from AIG to Goldman. The monies should have been used to reconstruct AIG as a last effort to save them and the economy.
American taxpayers were dumbfounded and equally outraged over the use of bailout funds because of insufficient data reporting, corporate bonuses, and insufficient duty based ethics. These packages were given to executives without consideration for the employees and the concessions that...

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