Discussion Topic

Concept and Brief Summary:

Incentive Pay for Executives

The executives of companies have a great force on the other employees. They are the ones that make sure everything is running right and smoothly. Everything is in their responsibility so when a company does badly it is all on the shoulders of the executive. The executive position is very sought out by business personnel. The risk is high but the rewards are great. They are usually only concerned with the company’s profits and stock price. When both of these are high, that means that the executive gets big money also. The sad part is that lots of companies don’t link pay to performance. Companies provide high paychecks for the best talent.

Emotional Hook:

What if your company wasn’t making the profits it normally did but the executive was still receiving millions of dollars in pay and bonuses? Would you feel like the company was compensating its employees fairly and equally?

Key points to elicit in discussion:

Incentive pay for executives is linked to how well the stock price is. Many executives have become victim to “cooking the books” by making it look like the company is worth more than it really is. There have been many examples of this ethical dilemma in the recent past. Many large companies have gone under due to the dishonest acts of the executives and financial personnel. Executives are able to buy and share stock when they know that the stock will skyrocket due to future financial deals that only they know about. There are many perks to being an executive of a company.

Facilitative Questions:

Why did company executives get the bonuses of many millions of dollars when there company had to get bailed out by the government? Why is it that there are contracted bonuses when there should be only bonuses based on performance? Are these people stealing tax payer money? Do they deserve or have they earned these so called bonuses? These companies were going bankrupt yet their executives are still reaping the rewards.