Executive compensation has been studied for many years. While the average person probably does not think about it on a daily basis, it is necessary to watch trends. Tracking the amount of money they make as well as the bonuses, stock options, and other benefits shows how these executives are making such high rates of pay compared to the ordinary worker. Tracking how much an executive makes began in the 1930’s. Since this time not only has it been tracked but there have been many changes in the type of tracking, the tax laws and what is available as compensation. This paper highlights the changes that have occurred since the early 20th century until today and changes that still need to occur.
On April 20, 2011, an oil rig in the Gulf of Mexico exploded on British Petroleum’s (BP) Deepwater Horizon. As a result, of the 126 BP crew members aboard, 11-15 were reported missing. Six days later, underwater robots reveal at least two leaks are dumping 1,000 barrels of oil into the Gulf per day. Consequently, this would become one of the worst oil spills in the history of the United States and perhaps the petroleum industry. This recent Oil Spill portrays one of many dilemmas BP has faced as it scrambles to expand and globalize itself as a transnational corporation in the world economy against other oil and gas companies. Although this disastrous event has affected BP negatively, the company has found a way to overcome it, while still becoming the 6th largest in the world; it continues to do this by offshoring, outsourcing, and merging with other oil and gas companies, three key strategies BP has been using since its establishment in 1909.
The United States is the most developed capitalist economy in the world. The markets within the economy provide profit-motivated companies endless potential in the pursuance of pecuniary accumulation. Throughout the twentieth-century competitive companies have implemented modernized managerial procedures designed to raise profits by reducing unnecessary costs. These cost-saving procedures have had a substantial effect on society and particularly members of the working class. Managers and owners of these competitive and self-motivated companies have consistently worked throughout this century to exploit the most controllable component of the production process: the worker. The worker has been forced by the influence of powerful and affluent business owners to work in conditions hazardous to their well being in addition to preposterously menial compensation. It was the masterful manipulation of society and legislation through strategic objectives that the low-wage workers were coerced into this position of destitute. The strategies of the affluent fragment of society were conceived for the selfish purpose of monetary gain. The campaigns to augment the business position within the capitalist economy were designed to weaken organized labor, reduce corporate costs, gain legislative control and reduce international competition at the expense of the working class. The owners have gained and continue to gain considerable wealth from these strategies. To understand why the owners of the powerful companies operate in such a selfish manner, we must look at particular fundamentals of both capitalism and corporation strategy. Once these rudiments are understood, we ...
The Moral problem in the case we are facing is that BP oil company are exploited the people, polluting the ecology, diluting the government guidelines, cheating everyone for their profits is not acceptable on part of giant company like BP .Oil being a natural resource is being extracted by the company for their vested interests neglecting the society and the climate. The food pyramid is getting affected due to its short cuts and lapse in guidelines and total negligence resulting in gross cheating and mass killing of live stocks in sea as well polluting the air. The government intervention at crisis is an example of socialism. BP operations are in more than 100 countries with several reserves are creating chaos for the people working
Although at the same time functional goals encourage unnecessary risk-taking and increased the probability of unethical and possibly unlawful behavior (James, 2015). All the same, the purpose of executive compensation is an incentive for well-trained executives that make the most of the firm’s value (James, 2015). Further, the benefit that is put in place for the executive is structured to remove all conflicts of interest amongst the executive and shareholders (James, 2015). Although, some workers feel as though the executive compensation is unethical; but according to James (2015) it is given to the executives that are well trained, therefore, it is ethical from his point of view. Additionally, the compensation package assists as an enticement for executives to participate in potentially risky, maximizing activities, and profits that benefit the shareholders whenever ventures are successful (James,
What BP did to alleviate growing fears made the controversy. They said there were no problems initially, then denied there were problems then they could not fix the problem. BP executives were flabbergasted regarding the intense media attention and upset after being taken to task for their incompetence. This paper will explore the issues surrounding the giant mess and what can be learned from the incident.
After reviewing Holland’s organizational strategy and exit interviews from the last seven years it is certain that through the new and effective compensation and benefits program created for Holland Enterprises, it will decrease the turnover rate, increase employee satisfaction and engagement and benefit the organization’s overall profits. Through careful consideration of pay structures, incentive awards, internal and external equities and the organizations benefits package Holland Enterprises new compensation benefits package will provide an effective and competitive compensation program. Henderson (2010) writes, “To survive and be successful in a global economy, an organization must be competitive. A major factor underlying organizational competitiveness is labor costs. Not only must an organization pay its workforce a competitive wage within its geographic region, but it also must vary the kinds and amounts of rewards offered, recognizing differences in individual contributions.” (p. 13)
BP turbulent history can be considered the impalement to the current safety and operational procedures. BP had emphasized personal safety and improvements, but the company had a personal injury rates that accounted for 95% of the injuries related to the oil industry. Following the Gulf oil spill disaster, a number of safety recommendations were endorsed by the Bureau of Safety and Environmental Enforcement. It was then BP realized the future of the company was in its on hands and possibly sealed, if they didn’t address the much needed safety and operational procedures. The organization had a clear understanding
In the Macondo blowout case, (Deepwater Horizon Oil Spill), leaders within Transocean and British Petroleum (BP) processed a “by any means necessary” mentality as well. The company cultures promoted doing whatever was possible to enhance profits. This oil leak and explosion, resulted in the loss of 11 lives, destroyed beaches and wetlands, and killed multiple wildlife species. The most telling piece of information throughout this case is that the oil spill and explosion could ...
CEO compensation has been a heated debate for many years recently, and it can be argued that they are either overpaid or that there payment is justified by the amount of work they do and their performance. To answer the question about whether CEO compensation is justified it must be looked at by the utilitarian viewpoint where the good of many outweighs the good of one. It is true that many CEO’s are paid an exorbitant amount of money; however, their payment is justified by the amount of money that they bring back to the company and the shareholders. There are many factors that impact the pay that the CEO receives according to Shah et.al CEO compensation relies on more than just the performance of the CEO, there are a number of factors that play a rule in the compensation of the CEO including the fellow people who help govern the corporation (Board of Directors, Audit Committee), the size of the company, and the performance that the CEO accomplishes (2009). In this paper the focus will be on the performace aspect of the CEO.
Imagine being in a world where people are paid in cash bonuses, stock options, or generous severance pay when fired from their job due to a company merger, are asked to leave, or choose to retire. This happens to be a reality for many CEO’s and top executives of companies. We live in an economy where mergers and take over’s have become common, and to allow this option for the highest paid employees of a company is arguably unfair. While researching golden parachutes, I formed questions due to the circumstances surrounding this executive option. For example, why should CEO’s, who live very comfortably, be given a compensation package for losing their position due to a company merger or retirement when employee and shareholder’s futures are at stake? Is it fair for the rich to get richer when numerous employees below top executives are dealt the same fate from a merger and shareholders’ investments are at risk but neither receive a form of additional compensation? Of course, there’re those who support the issuance of golden parachutes, arguing they can persuade a possible company merger to not take place due to the costs associated with a top executives golden parachute package. Another supporting point for golden parachutes is, they can make it easier for higher up executives, like CEO’s be absorbed into the future merged company. I will be addressing the point of whether CEO’s and other executives deserve to be awarded a Golden Parachute option by their company. As well as a brief background of Golden Parachutes and my stance on them. They’re a very important part of our growing economy and will always be considered in a merger/takeover if awarded to executives.
Organizations that only have top management as the board members are more susceptible to accounting malpractices. Members of the board should preferably own shares in the company to ensure diligence when it comes to the interests of the company. Apart from the Board of Governors, there should also be an audit committee in place to oversee the financial dealings of the bank. Members of the board and the audit committee should have basic financial knowledge. Some of the members should also be experts in finances so that they can detect any anomaly that may take place in terms of financial reporting. An overhaul of the regulatory framework is required to empower authorities to intervene immediately, and make improvements. New technology is required. Manual antiquated processes should be eliminated because this causes greater human error and poor
K, . N., ER, w., DAVID, K., PAUL, M., WALTER, O., & EVANS, A. (2012). Corporate governance theories and their application to boards of directors: A critical literature review . Prime Journal of Business Administration and Management (BAM), 2(12)(2251-1261), 782-787.