Corporate Scandals: How Greed Consumed the American Dream Essay

2010 Words Dec 12th, 2005 9 Pages
Corporate Scandals: How Greed Consumed the American Dream Enron is not even at the top of the list. More and more corporate scandals are happening in America. Why have these scandals just shown up in recent years? What causes these corporations to lie and be deceitful towards investors? Though once seen as legitimate, fair, honest, and respectable, corporations have arrived at a stage of greed and deception. This can be explained by a number of factors such as the how the stock market works, the stock market boom, the stock market flourishing, changing company practices, new CEO benefits, and specific company examples. Public companies are any company that has stock available to the public to buy. A company that wishes to set up a new …show more content…
These companies that did not are our Enron's and others like it who now stand trial for their lies and deceit to the public and their employees. CEO's were telling people they were still thriving and to keep investing, though they were piling up large amounts of debt. Accounting books were being changed and auditing firms were helping companies cheat the system. These flourishing years led to the eventual crash of the market. Companies were declaring bankruptcy all of a sudden after many lies of doing well. Investors lost all of their money and as odd as it is, CEO's were selling their shares right before this would happen. This would hurt the company more and still keep the CEO's rich. Employees were laid off and without jobs. All of the money they owned in their stock options were gone and retirement was lost. These scandals are the cause of the stock market to crash and devastated many lives of people as investors and employees. The board of directors and a compensation committee determine the compensation of the CEO of our publicly traded companies. Yet too many companies in this country have no internal process to evaluate the CEO's performance. They have effectively outsourced the evaluation of CEO's performance and compensation to the market, and often to consultants. As an example, from 1990 to 2001, the share of equity-based compensation in total CEO compensation (how much is

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