Essay on Executive Bonuses

901 Words4 Pages
In Corporate America there are organizations that pay their executives bonuses. In addition to, the six figure annual salary that most of them earn. The past few years the country has been going through a recession, many people are unemployed and in need of a job and many companies are still downsizing. Therefore, I do not think it’s logical for a company to payout such large bonuses to executives. Companies should be more socially responsible by creating jobs for some of the unemployed and distribute a portion of the money to executives in bonuses. The three issues I have regarding executive bonuses are: What is the bonus structure for executives, why does the board of directors approve such large bonus payouts, and how often are these…show more content…
That information should be confidential; the SEC wants to access strategic information of an organization. “While executive compensation reform is targeted toward publicly traded companies, experts advise nonprofits to be prepared for similar requirements and to implement SEC disclosure rules when making pay decisions." (www.cutimes.com) The Board of Directors is in control of bonuses paid to top executives. “I am sure you will find your blood boiling by how much money in bonuses a select few top executives receive. You will feel outraged that so few people receive so much money that could benefit so many more people.” (www.oppapers.com) There are certain board members on the committees that determines the top executives’ salaries. The compensation committees for the board of directors authorize the annual income and bonuses of top executives, also the board of directors. (www.2020wob.com) Banks have received help from the government to bail them out of debt, but yet the banks still award top executives bonus pay. With the downturn of the economy how is that possible? (www.oppapers.com) The FDIC said if a huge chunk of bonus money was paid out over several years it would decrease the amount of bonus money executives collected if the company did not perform well during the year. (http://finance.yahoo.com) Outsize bonuses have contributed to financial crisis, says the lawmakers and government officials, they don’t advise taking long-term risks.
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