In an opinion piece for The New York Times, M.I.T economics professor, Michael Greenstone, examines the parallels between Enron, the corporate accounting scandals of the early 2000’s and the sub-prime mortgage crisis/Great Recession of present day. Greenstone points out that the biggest similarity and ethical hurdle in both scenarios is the fact that auditors were hired and paid for by the very firms they were being asked to audit. Naturally, this created an enormous conflict of interest on the part of the auditors to present truthful findings, while at the same time, feeling the pressure to please their clients. Although…
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Just because a corporate stock price is on the rise, is that justification enough for the huge payouts executives receive? While shareholder returns are usually the most prominent factor considered by corporations when determining executive pay, many elite business school educators and industry experts don’t think they should be. They contend that executives regularly profit off short-term bullish markets where returns had little or nothing to do with their operations, strategy or lack of innovation. In an interesting piece by The New York Times, experts suggest that executive pay should be tied more closely to what management did to increase…
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Obama’s New Vision: No Further Increases in Tax Rates; Instead Focus on Eliminating Loopholes and Deductions And just last week all the pundits were saying any sort of serious budget deal was dead. Now, The New York Times, CBS News, and Washington Post/Associated Press report that president Barack Obama said future deals with Congress on the U.S. budget could set aside the option of raising tax rates and, instead, focus on eliminating tax loopholes and deductions to reduce the deficit. “I don’t think the issue right now is raising rates,” Obama said. Instead, a focus might be on mortgage interest…