Executives can be defined as those people in the organisation who have managerial or administrative authority. These include the top officials in the governments, managing directors and CEOs of companies just to mention but a few. Because of the position they hold, these people are entitled to huge amounts of salaries accompanied by other benefits such as bonuses. The federal government on the other hand is a section of the government that deals with providing services to the civilian employees with the main aim of improving the lives of the people of the United States and around the globe (Bureau of Labour Statistics 1).
As part of its duty, the federal government is responsible for the payment of federal workers to make sure that it is in accordance with the Bureau of Labour Statistics. In addition to the payment, executives are also paid bonuses as a form motivation or reward after a good work for the organization. The question therefore remains as to whether the bonuses of executives should be regulated by the federal government.
The executives of any organisation are prone to allocate high amount of bonuses for themselves at the expense of the organisation. For example, research indicates that most executives have been getting seven or even eight-figure bonuses in the recent past. Despite the fact that bonuses are additional funds on the stipulated payments, they should be regulated by the federal government to ensure efficiency since they are part of the organizations’ or governments funds.
The regulation is aimed at protecting both the employer and employees. For instance, the federal government has enacted rule that governs corporations against bankruptcy which go further to state that corporations under bankruptcy should not payout executive bonuses (Jacobson 1). This is done to save some funds for the corporations to be able to settle with their creditors. If the bonuses are not regulated by the federal government, the situation would be different as the executives of the organisations would demand their bonuses despite the corporation’s financial position thus leading to insolvency if the case goes to worse.
On the other hand, the federal government must regulate the executives’ bonuses to avoid cases of low or even no bonuses for the executives who have worked hard to earn so much profit for the organisation. This is common in most banks and insurance firms who may fail to payout bonuses to their executives yet they have so much in the capital markets and other forms of investments.
However, looking at this scenario from a different perspective is that most organisations that would not want any government’s intrusion would not agree to the idea. Their argument would be very simple that, the executives should have compassion for their fellow citizens. This is to mean that the executives should want to have much for themselves at the expense of others. It is through common sense that they should not allocate any bonuses if the company is bailed out. Studies did show most of the Americans would not prefer government’s intervention for the fear of regulating the workman’s pay at the lowest level (Morris 1). A study case is when the federal wage committee settled that a worker in roofing business is subjected to a salary of $20,000 in a fiscal year (Morris 1).
All in all, I would argue that the course of action to take regarding the executives bonuses will depend on the corporation’s point of view.
Works Cited
Bureau of Labour Statistics. Federal Government. 2010. Web.
Jacobson, Louis. No sign of action on promise about executive bonuses. 2011. Web.
Morris, Network. Do you think the federal government should regulate executives’ pay at bailed out companies? 2011. Web.