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Argument Against Bonus Payment After Company Bailout (Essay Sample)


should companies pay out bonuses to their employees after bailout.


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Argument Against Bonus Payment After Company Bailout
The main aim of a government bailout is to prevent companies crucial for the national economy from collapsing. Firms receiving bailouts, specifically in the form of loans, can use the funds to meet their financial obligations. These obligations include compensating employees appropriately through salaries and bonuses. However, in case of a bailout, employees should not be offered bonuses for various reasons.
Companies often provide financial compensation to reward their employees for putting in extra work or achieving specific goals. They may also offer bonuses to retain top talent. However, there is usually no risk of employee turnover or evident employee effort that warrant bonus payment after a bailout. Some experts even argue that top employees should be held responsible for leading their organizations into failure (Heineman). This argument is based on the fact that firms can predict the potential for failure and make plans to evade bankruptcy (Schillig 168). Hence, employees should not be offered bonuses after a bailout.
Furthermore, governments use taxpayers’ money to bail out ailing companies. Therefore, taxpayers must be concerned when the bailout money is used in ways that are considered inappropriate. One perceived inappropriate way to use bailout money is to enrich salaried employees further at taxpayers’ expense (Schillig 45). At the same time, the public views bailing out failing companies as a potential for developing immoral behavior among established companies. Generally, these companies might view bailouts as the solution to their irresponsible behaviors, such as mismanagement and poor planning habits. As such, it is unethical to pay employees bonuses

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