Are executive bonuses okay?

http://online.wsj.com/article/SB10001424052748703294004574511223494536570.html

In this article from the Wall Street Journal, one journalist gives his opinion on whether Executive Bonuses should exist today. He believes that companies should scrap the whole idea of the cash bonuses, mainly because of the corrupt history they have created in the past. This journalist has many reasons why he believes that Executives should not receive cash bonuses and also states the false assumptions of companies. He believes Executive Bonuses represent the most prominent form of legal corruption and that they are bringing down the global economy.

After reading this article, I realized that much of what this journalist was saying related to the chapter in our book about leadership ethics. The chapter is not about a leadership ethics theory, per se, but it does provide a guide to some of the ethical issues that can arise in leadership situations. According to the book, "ethics is concerned with the kinds of values and morals an individual or society finds desirable or appropriate" (378). Concerning leadership, ethics has to do with what leaders do and who leaders are.The article states that executives should not receive bonuses for several reasons, many of which have to do with the ethics behind it. It seems as though the executives that are describes are exhibiting characteristics of ethical egoism. Ethical egoism is when a person acts to create the greatest good for herself or himself (379). The article states that executives collect bonuses even when it just appears as if they are winning, even when they lose,  just for drawing cards, and even just for sticking with it and staying with the company. All of these actions demonstrate that these executives are not doing anything for others, but making sure that they receive a bonus, whether or not they really deserve one or not. The article states that, "This may be nice work if you can get it, but it is awful work if you care about the sustainability of an enterprise." And this just shows that executives that receive bonuses aren't really interested in keeping the company around for a long time, as long as the bonus benefits themselves right now.

Additionally, I believe this article relates to the influence dimension of ethics as well. The influence dimension of leadership requires that the leader have an impact on the lives of those being led (382). And, since the leaders have more power, they have more responsibility to be conscious of how their leadership affects followers' lives. The article states that the executives that receive bonuses are more like gamblers than leaders; directly relating to the influence dimension. Executives are acting like gamblers, but they are playing with other peoples' money. As an executive of a company, you are responsible for the stockholders' money as well as the livelihood of the employees and the sustainability of the company.Therefore, executives that take the cash bonus are not exhibiting the influence dimension in a positive way.

After reading the article and my blog post, do you think executives receiving bonuses is ethical? If so, can you argue against what I stated above?


(posted by: Kelly Yuen)