Government and Ethics – Assignment Example

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The paper "Government and Ethics " is a wonderful example of a politics assignment. The purpose of this paper is to address the question of whether or not the Executive Branch and/or Legislative branch of the US Government has the authority to regulate CEO salaries. This paper will first examine York’s (2009) article “Beyond AIG: A bill to let Big Government set your salary.” The article first highlighted that the House of Representatives passed a bill at 328-93 that would impose a 90% retroactive tax on bonuses paid out to executives of AIG with the express purpose of prohibiting unreasonable and excessive compensation and compensation not based on performance standards. From this Perspective Rep. Alan Grayson a Democrat from Florida postulated that people should not get rich from public money as a result of total managerial failure. However, the important message to walk away from this message is that this bill was intended to be directed to CEO’s from major institutions that have received federal bailout funding. Ordinarily, most people would say that if a company is failing and requires federal funding to stay afloat, then in effect the company has entered into a kind of partnership with the government and would be susceptible to certain salary conditions that may include reduced wages. The question of whether or not the government should regulate the salaries of regular executives (Specifically CEO’s) is another matter altogether. It can be the case that a company is performing extremely well and paying out numerous bonuses across the entire operation. In this circumstance, it could be argued that it is not in the interest for the salaries of CEO’s to be regulated. It is the case that according to Wassener HSBC’s Chief executive (Michael F. Geoghegan) will be relocating to Hong Kong to help expand the business. What this indicates is that in an increasingly global economic world, there is nothing holding a particular business or business executive to a particular location. If for example, the United States were to put a cap on CEO’s salaries than it may be the case that the company relocates its operations to a nation that would not put such financial constraints on its business practices. In this regard, if the United States were to significantly cap the salaries of CEO’s they could jeopardize keeping the whole operation in their borders and potentially lose many jobs. In an effort to remain competitive the United States government should do what it can to promote business staying within their borders, and if it is the case that a business needs a government bailout, a salary cap on CEO’s and a bonus cap might be justified however if a regular company is performing well then it could be the case that a government should let the companies design their own remuneration packages.



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