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Bankrupt Bonus The Economic Crisis Thesis

Though the director claimed to have no knowledge of the accounting fraud, analysts wonder what other than his silence could possibly warrant such a high compensation package (English 2002). This is yet another company where slews of jobs were lost, pensions and benefits disappeared, and yet many top executives received lucrative compensation and severance packages, five years before any TARP funds were available to provide them. There is some hope that the situation might change, however. In the wake of the financial scandal, and even in the years leading up to it, many CEOs signed deals agreeing to limit their own pay should their companies hit troubled waters (Penttila 2009). Congress has also been considering legislation that would either directly limit executive compensation in public companies, or allow for direct shareholder say in the compensation of company officers, but often this type of "consideration" is really political double-speak for seeming active until the wave of public sentiment dies down and business can proceed as usual (Penttila 2009). There is, however, increasing evidence of performance-based pay structures for executives, meaning that they won't emerge with millions of dollars after driving their companies into the ground -- if these practices are actually put into place.

There is...

There is some evidence that this is already occurring; most of the news regarding CEO compensation is nearing a year old, and there has yet to be any real change. The same companies still exist, though there are fewer of them today, and in all likelihood they will continue to conduct business in the same way. Congress has no real teeth when it comes to this issue; they are politically dependent on the support of many corporations, and most have certain corporate interests of their own. Money is a huge part of our political system, and it is naive to think that this can be changed or power and wealth wrested away from those who have it on a large scale.
References

English, Simon. "WorldCom Chief was Aware of Fraud." The Telegraph. Feb 27, 2009

Kopecki, Dawn & Goldman, Julianna. "Obama Calls Bonuses Shameful and as Dodd Vows to Reclaim Money." Bloomberg. Feb 27, 2009 .

Oliphant, James. "Stimulus' Cap on Executive Bonuses is Too Sweeping, Experts Warn." Los Angeles Times. Feb 27, 2009

Pentilla, Chris. "Rethinking CEO Salaries." Entrepreneur Magazine. Feb 27,2009

Sources used in this document:
References

English, Simon. "WorldCom Chief was Aware of Fraud." The Telegraph. Feb 27, 2009 <http://www.telegraph.co.uk/finance/2767881/WorldCom-chief-was-aware-of-fraud.html>

Kopecki, Dawn & Goldman, Julianna. "Obama Calls Bonuses Shameful and as Dodd Vows to Reclaim Money." Bloomberg. Feb 27, 2009 <http://www.bloomberg.com/apps/news?pid=20601087&sid=anzJooSeABDM&refer=home>.

Oliphant, James. "Stimulus' Cap on Executive Bonuses is Too Sweeping, Experts Warn." Los Angeles Times. Feb 27, 2009 <http://www.latimes.com/news/nationworld/nation/la-na-stimulus-executive-pay15-2009feb15,0,7786166.story>

Pentilla, Chris. "Rethinking CEO Salaries." Entrepreneur Magazine. Feb 27,2009 <http://www.entrepreneur.com/magazine/entrepreneur/2009/february/199680.html>
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