Ethics Paper--Bailout

The Royal Bank of Scotland - just like many other banks and businesses - paid out its managers considerable bonuses for their performances. Managers at RBS started maximising their bonuses by aggressive actions such as take overs and investing in complex financial products. These actions caused the profits of RBS to grow rapidly, which meant high bonuses for the managers. These actions, however, also meant the stability and financial safety of RBS on the long-term got worse and worse. This was not a problem for the managers as they had already earned their bonuses. A different bonus structure probably would have prevented the reckless actions of the RBS managers.

Things just did get better for some bankers who will get a bonus off the recent US bailout - I don't know how they regulate it in other countries. I, like many, don't understand how CEO's walk away from dying companies with tens of millions. How is that legal? What are their Higher CEO's thinking? It is a mean puzzle to contemplate.

In the case presented both AFLAC and L.L. Bean had their own distinctive ways of utilizing their products in order to enhance the total compensation for its employees. The factor that has deterred more employees away from their current employer is that of benefit packages, and reward systems. As stated by () “compensation affects a person economically, sociologically, and psychologically. For this reason, mishandling compensation issues is likely to have a strong negative impact on employees and, ultimately, on the firm’s performance” (p.313). Many felt just a bump in pay wasn’t enough to substantiate their hard work or the efforts that the performance efforts provided to their organization. As stated by () “the right total rewards system a blend of monetary and non-monetary

It was reasonable for a CEO’s compensation to increase as the company expanded and became a larger entity, and the newly-granted shares and increasing stock options further aligned the CEO’s personal interests with those of the company and shareholders. In this sense, the second compensation package was also well-structured and not excessive. Seeing Sunbeam’s revenue rising and stock price climbing steeply upwards, Sunbeam’s shareholders and directors were fully convinced by Dunlap’s leadership, so they might perceive the increase in compensation amount necessary to retain and better motivate Dunlap to enhance the company’s value. Nonetheless, they neglected the fact that the increased portion of the equity-based compensation also further motivated the CEO’s dangerous behaviors pertaining to improper earnings management.

It is clear from the review of the corporate budget that the executives are earning very high bonuses without complying with the promises that were

My late answer is not going to meet with the openness of minds, when saying that not enough lavish gifts or bonuses, were given when having a party at a corporate retreat! By the presidential administrations rewarding horrific management styles, lack of leadership, and forth sight by corporations and given billions of dollars by the government. It no longer became the American tax payer’s money and became the money of whoever it was given to. When the President signed the American Recovery and Reinvestment Act of 2009 that was approved by the Democratic political party organization control of House of Representatives, and only did by the fact that 100% of the representatives that are associated to the Democratic Party political organization, voted yea, with eleven representative associated to the Republican Party political

A health care case in need of evaluation using the steps to ethical decision making is described in Ethical Dimensions in the Health Professions by Ruth B. Purtilo and Regina F. Doherty. According to the book, a student named Andrea was working in the outpatient clinic one morning when she saw someone she knew. Her father’s business partner, Mr. Brown, whose health was failing and interfering with his earnings according to her father, was sitting in the waiting area chatting with another man. The man was young and very different from Mr. Brown, wearing a torn leather jacket. Andrea did not think anything of it at the time because she

7. Option compensation will continue to be a critical component of compensation for executives as it simplistically aligns the executives’ pay to shareholder value in its simplest sense. I don’t believe that options compensation is the primary driver of behavior when things shift from the legal to the illegal. As with most senior executives in industry, ego is a huge driver in individual behavior. Compensation is important, but the recognition of your performance is sometimes even more important. We have created a performance driven culture without the necessary control framework for people to operate within. One minute you are doing a great job, the next you have crossed an imaginary line. The frameworks don’t do enough to quantify behavior as legal and illegal leaving inconsistent rules for organizations to operate within. How does Enron compare to the subprime mortgage debacle, or to Steve Jobs backdating options. There remains too much room for interpretation.

Due to TARP, Troubled Asset Relief Program, Banks made record profits in 2009 and were able to repay these government funds within the year that they were provided. Banks invested the government money and, as a result, made record profits. CEO’s received their large bonuses as a result of the repayment; however, homeowners lost their homes, jobs and confidence in

The Great Recession inflicted abundant harm in the U.S. and global economy; 8.7 million jobs vanished (Center on Budget), 9.3 million Americans lost their homes (Kusisto), and the U.S. GDP fell below what the economy was capable to produce (Center on Budget). The financial crisis was unforeseen by millions and few predicted that the market would enter a recession. Due to the impact that the recession had, several studies have been conducted in order to determine what caused the recession and if it could have been prevented. Government intervention played a key role in the crisis by providing the bailout money that saved those “Too Big to Fail” institutions. Due to the amount of money invested in the bailout and the damage that the financial crisis had on the U.S. population, “Too Big to Fail Banks”, and financial regulation are two of the biggest focuses of the presidential candidates. Politicians might assure voters that change will occur, but is it to late for change to be efficient, are the financial institutions making the same mistakes that led to the financial crisis?

Bush on October 3rd, 2008. Some of the recipients of this bail out were and continue to be large financial institutions including Wells Fargo & Co., JP Morgan Chase & Co., Goldman Sachs Group Inc., and Morgan Stanley. In this situation the banks are not only able to continue risky behavior, but take little to no responsibility for their actions in causing such a situation. Fundamentally, if the financial institutions were bailed out once it has set a precedent for other financial institutions to view and believe that taking part in risky behavior will not affect them in the long run.

Goldman Sachs should have been punished for its behavior in the years leading up to the financial crisis. Goldman ended up settling with the federal government for $110 Billion, which I do not believe was sufficient based on the magnitude of problems created. This amount should have been much larger, and at minimum they should have forfeited the $14 Billion paid to them by AIG. (Inside Job, 2011) In addition, AIG should have had the right to sue Goldman Sachs for fraud. It was in the public’s best interest to keep Goldman up and running, however additional penalties could have been put on a repayment schedule to keep them solvent. Instead, you had Goldman giving out large bonuses.

What is right or wrong? People base their values of right and wrong on what they have learned from their experiences (Ferrell, Fraedrich, & Ferrell, 2018). What one person sees as wrong, may be a normal for another. Most people are taught to work hard, save money, and invest for a future retirement. However, when it comes to money, some people lose all principles and standards of behavior. There were several ethical issues in the Madoff case. They include: stealing, cheating, lying, misrepresentation, and deliberate deception. Madoff used the Ponzi scheme or the money pyramid to make his money. In the Ponzi scheme, money was taken from new investors and given to existing customers as earning without being invested. Was this right or wrong? Throughout this case study ethical concerns can be seen on both sides, the investors and Madoff’s.

This work will examine the case 'Banking Industry Meltdown: The Ethical Financial Risk Derivatives" and determine which moral philosophy is most applicable to an understanding of the banking industry meltdown and explain the rationale. The case study will be analyzed and white-collar crimes considered as to whether they are different in any substantive manner from other more blue-collar crimes. This study will determine and discuss the role that corporate culture played in banking industry scenario and the response will be supported with specific examples. This work will postulate how leaders within the banking industry could have used their influence to avert the industry meltdown.

Those same 25 executives announcing the layoffs had just one week earlier paid themselves "retention bonuses" of $55 million" (Diekmann, 2005). These employees did not show or use ethical business conduct by making sure they themselves received pay; they are just as guilty as the top executives involved with the accounting scandals.