Executive Compensation Packages Persuasive Essay by Nicky

A discussion on today's mammoth executive compensation packages.
# 146288 | 1,623 words | 10 sources | APA | 2010 | US
Published on Dec 24, 2010 in Business (Management)

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The paper argues that the executive compensation packages of today are excessive. The paper explains that they are the product of an irrational view of the market for executive talent, combined with certain legal structures that allowed for executive compensation to get out of hand. The paper discusses how the use of short-term options in executive compensation packages leads executives to focus on short-term results and therefore encourages accounting scandals. The paper then points out that it is only recently that shareholders are being granted the ability to influence executive compensation schemes.

From the Paper:

"Once again, executive compensation is making headlines. This time, it is the executives at banks that received TARP funds. Bonus pools at the nation's banks totaled $18.4 billion dollars, even as these same banks suffered record losses and laid off some 265,000 people as a result of their poor financial performance (Kopecki & Goldman, 2009). The banks have defended their actions, citing the need to retain top talent. Some industry observers have supported this claim (Oliphant, 2009). They maintain that if the banking industry is restricted in terms of its bonuses, its top people will take jobs in other industries, or in other countries where they can earn more money. While there is some logic to that standpoint, it ultimately fails to demonstrate understanding of why we have bonuses in the first place. When you understand the point of bonuses and other components of executive compensation, you can see that today's compensation packages make no sense. As a rule, executives are simply not worth the mammoth packages they receive."

Sample of Sources Used:

  • Kopecki, Dawn & Goldman, Julianna. (2009). Obama Calls Bonuses Shameful and as Dodd Vows to Reclaim Money. Bloomberg. Retrieved February 27, 2009 from http://www.bloomberg.com/apps/news?pid=20601087&sid=anzJooSeABDM&refer=home
  • Oliphant, James. (2009) Stimulus' Cap on Executive Bonuses is Too Sweeping, Experts Warn. Los Angeles Times. Retrieved February 27, 2009 from http://www.latimes.com/news/nationworld/nation/la-na-stimulus-executive-pay15-2009feb15,0,7786166.story
  • Friedman, Milton. (1970). The Social Responsibility of Business is to Increase its Profits. New York Times Magazine. Retrieved February 27, 2009 from http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
  • Balsam, Steven. (2007). Frontline Reaction to FASB 123(R) Journal of Accountancy. Retrieved February 27, 2009 from http://www.journalofaccountancy.com/Issues/2007/Apr/FrontlineReactionToFasb123.htm
  • English, Simon. (2002). WorldCom Chief was Aware of Fraud. The Telegraph. Retrieved February 27, 2009 from http://www.telegraph.co.uk/finance/2767881/WorldCom-chief-was-aware-of-fraud.html

Cite this Persuasive Essay:

APA Format

Executive Compensation Packages (2010, December 24) Retrieved April 20, 2024, from https://www.academon.com/persuasive-essay/executive-compensation-packages-146288/

MLA Format

"Executive Compensation Packages" 24 December 2010. Web. 20 April. 2024. <https://www.academon.com/persuasive-essay/executive-compensation-packages-146288/>