Exxon Valdez Oil Scandal

The purpose of this research paper was to investigate the news media’s depiction of the 1989 Exxon Valdez oil spill. The coverage provided by the newspapers was compared to that of scientific journals to access their validity and insight. The reactions the coverage evoked on the public were also studied. The paper specifically addressed the media’s portrayal of the oil company versus that of environmental groups. It was found that the news media did not include the benefits the oil company had had on the people and economy of Alaska. It was also found that up until 1989, many Alaskans were opposed to environmental groups. Next, the paper followed the role the media played on the public’s emotions and subsequent government

Enron was named the most admired company for six years in a row, and it was widely considered one of the best companies to work for by Fortune magazine. Enron shocked the world, and it's stockholders when it was revealed at the end of 2001 that the company’s “reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud”. (Enron, 2011, para. 1) Enron maximized it’s long-run profits for itself, but not within the limits of the law. Enron disregarded it’s social responsibility to it’s stackholders when the company only strive for it’s maximized profits, and didn’t strive

On March 23, 1989; a 987 foot Exxon ship was carrying 53,094,510 gallons (1,264,155 barrels) of North Slope crude oil and was headed for Long Beach, California. Before that day, they transported more than 8,700 times over 12 years without problems.The Exxon Valdez grounded at Bligh Reef that day, rupturing 8 of its 11 tanks. These spilled about 10.8 million gallons of crude oil into Prince William Sound (Gulf of Alaska). No human lives were lost as a direct result of the oil spill, even though through clean up processes 4 people died. As a result however, there were many indirect and immense losses pertaining to humans and nature. (You can see one clean up event in the picture at the top,

In the aftermath of major scandals and bailouts in the United States, the world`s and the public’s confidence in public corporations, has been shaken. With the publicized scandals of Enron and other corporations in the United States, the faith in public corporations fell as fast as the stock market. Investors had no confidence in corporations or in their boards. Measures needed to be taken to form regulations to provide stronger accountability, to prevent these types of scandals from happening and to rebuild the confidence of investors. Corporate governance of publicly traded

Executive compensation has been at the forefront of discussion for a long period of time. Analyzed by academics, highlighted by the media, questioned by Congress, and scrutinized by the general public, the topic warrants much debate. In the 1990’s, total executive compensation increased substantially as companies began offering stock option programs; CEO’s of S&P 500 saw an average increase of 150%.

On March 24th 1989, the Exxon Valdez oil tanker ran aground in Prince William Sound Alaska, spilling roughly 10.8 gallons of crude oil polluting over a thousand miles of Alaska’s coast (Gerken, 2014). At its time, it was the worst oil spill in history, lasting for several days. It was caused by the negligence of the captain who was reportedly intoxicated at the time. The oil was very quickly dispersed over a wide area of land because of extreme tidal fluctuations and a storm several days after the spill (http://www.eoearth.org/view/article/152720).

In practice, the use of stock options in the corporate sector has increased to account for nearly two-thirds of total pay for CEOs in median firms, a figure that trumps 1984 estimates, where stock options accounted for only 1% of total pay (Denis et al., 2006). So the question we must ask is when we use stock option based incentives for executives, does the evidence warrant the need for greater controls or regulation? Denis et al. (2006) briefly explores the idea of the need for greater outside monitoring, and discusses how the “dark side” of stock incentive compensation may require robust corporate governance structures to counter-veil the negative effects. Erickson et al. (2006) points out that regulators and policy-makers are quick to link corporate fraud and stock options. They (Erickson et al. 2006) state that the intent of their research was in part to resolve the question as to whether there exists evidence that stock-based compensation is tied to accounting fraud. Since no evidence is found, the policy implications for greater controls are limited. Burns et al. (2006) study has implications for the level of options and equity in CEO remuneration contracts. Efendi et al. (2007) does not provide any policy recommendations, but do call for further research

Widely known as the champion of the energy industry, Enron is suddenly faced with a corporate crisis in the form of a scandal. This scandal involves not only Enron’s accounting practices but also its corporate governance and culture (Lawrence & Weber, 2008). This report will recommend some potential strategies for Enron to move forward from the scandal. To do this, we must incorporate stakeholder theory, which “argues that corporations serve a broad public purpose; to create value for society” (Lawrence & Weber, 2014, p 6.). This means that Enron must take responsibility for the scandal it created and take actions to regain its stakeholders’ confidence. To accomplish this, we will first identify and analyze Enron’s primary

Enron is not even at the top of the list. More and more corporate scandals are happening in America. Why have these scandals just shown up in recent years? What causes these corporations to lie and be deceitful towards investors? Though once seen as legitimate, fair, honest, and respectable, corporations have arrived at a stage of greed and deception. This can be explained by a number of factors such as the how the stock market works, the stock market boom, the stock market flourishing, changing company practices, new CEO benefits, and specific company examples.

The faith in corporate America has been somewhat fragile with the knowledge of many corporate wrongdoings like the Enron scandal, recent financial buyout, and the ethical issues with bonuses for executives. Dipankar (2008) has a theory that

Between 2001 and 2003 there were several corporate accounting scandals that occurred that took the world by surprise. A lot of investors lost a lot of money and several employees lost their jobs. These accounting scandals occurred due to management misconduct, fraud, and scams that occurred within these companies. Within the United States, the big cases typically viewed are the Enron, WorldCom, and HealthSouth cases, however, it is forgotten that Europe experienced a similar situation with Parmalat, Royal Ahold, and Vivendi Universal. Soltani (2014), discusses the importance of understanding the motivation and causes of financial corporate scandals. Soltani (2014) notes three research questions associated with this article: 1. “What are the common

Even after being aware about climate change and spending millions of dollars on climate change research, I think that Exxon refused to publically acknowledge the science because the corporate leaders were more concerned about surplus than long-term environmental impacts. Like the tobacco industry, they were worried that their products would not sell if the public understood the risks. Also, accepting the science would have led the United States to sign the Kyoto Protocol, which would have meant introduction of stricter emission control policies.

Developed and developing economies have caused a shift in the scope of business. As the world as a whole progress’, jobs have become more demanding. “In our knowledge-based economy, value is the product of knowledge and information. Companies cannot generate profits without the ideas, skills, and talent of knowledge workers, and they have to bet on people-not technologies, not factories, and certainly not capital” (Martin & Moldoveanu, 2003, pg. 36). More demanding job requirements have caused companies to only hire the best. “Workers now require more

Expanding its business by utilizing its energy-trading model, Enron’s top executives fooled major financial institutions and accounting firms by hiding its losses from these new ventures within its financial statements. In the beginning, Enron was revolutionary in the gas pipeline industry, because it took advantage of the deregulated environment. As a result, Enron could ensure their customers, gas suppliers, consistent gas prices through hedging (Healy and Palepu 2). Enron’s success with this energy-trading model built its trustworthiness in the energy industry and beyond. Obviously, Enron proved its ability to successfully turn a profit with earnings of $979 million in 2000, which further instilled cognitive-based trust within its stakeholders (Healy and Palepu 1). Establishing itself as a progressive corporation, Enron sought to unload its heavy assets, such as pipelines, for lighter assets in the realm of the digital age. Furthermore, Enron management attracted the best employees to work for them by offering extremely generous salaries and bonuses. Another benefit of being an Enron employee was that Enron maintained a non-bureaucratic environment through committee-based employee performance evaluations (Healy and Palepu 4). Overall, Enron’s financial strength, cutting-edge ideas, and high-performing workforce established cognitive-based trust within its stakeholders.

Part one, describe the role of stock options in the growth of executive compensation over last 20 years.