BAIL-OUT MONEY

Should the Top Executives of the Major Banks that Received Bail-Out Money be Allowed to Receive Large Bonuses?



Should the top executives of the major banks that received bail-out money be allowed to receive large bonuses?

A bailout is an act of loaning or giving capital to an entity (a company, a country, or an individual) that is in danger of failing, in an attempt to save it from bankruptcy, insolvency, or total liquidation and ruin; or to allow a failing entity to fail gracefully without spreading contagion. In banking industry, should the top executives of the major banks that received bail-out money be allowed to receive large bonuses? Bankers have received their bailouts and now want to give billions away in bonuses.

Whilst to an extent spending money on events and parties, bonuses may seem frivolous, one should not immediately write off how such activities add value to a company. Allowing prior traditions to continue will ensure that workers feel the benefit of their labors, rather than feeling that they are undervalued which could potentially reduce effort in the workplace. In our currently uncertain economic climate it is important to keep morale at a reasonable level, as security of jobs will be praying on the minds of many. Whilst scaling down of both bonuses and parties would be prudent, cancelling them completely would do very little for general stress levels. It is all too easy for outsiders to assume what money should be spent on without considering the mechanics that allow a business to operate fruitfully (Anderson, 1993).

Bankers and their families are used to a certain life style. It will stimulate the economy. It is one of the perks of the job. Need to keep morale high and encourage team spirit, is not a valid point. What about the morale of the poor shareholders or the chap who has lost his job?? Many of those still in a job at the banks need to reflect on those people who haven't got a job. That money is needed elsewhere at the moment (Wright, 2009).

The latest on the corporate corruption front seems to be that employees of financial institutions are still waiting to pay premiums for employees. The crazy thing is to think that while we must reduce and try to save more money for anticipated tax increase to pay the ransom, it is actually money that is used to pay bonuses to executives. Therefore, from the moral ethics of Utilitarianism, ethical preferences of which there are different utility function as a utility maximization. Utilitarian ethics would be better than we are ethical in the economic analysis, but it has its own weaknesses. These weaknesses need another for the economy, ethics, emphasizing the interaction between the actors and go beyond the rules of the common values of society and institutionalized commitment to ethical theory. Virtue ethics is inherently as a preference or constraint, but by agents in which the value of their search-related practices. As is generally known, utilitarianism allows individual agents ...