In a comment on a posting on corporate feudalism - the idea that corporate "lords" have the right to kill, maim, or poison or to destroy the property of non-corporate "serfs" - this issue of executive compensation came up. Specifically, the comment concerned executive compensation for companies that received billions of dollars in government assistance.
I would like to look at this issue from a desire utilitarian perspective.
President Obama has said that one of his three objectives in this bailout is to establish a regulatory framework to make sure that nothing like this happens again.
Desire utilitarianism suggests another avenue to pursue in addition to regulation. That is condemnation and punishment.
Ninety percent of the executives of companies that have received government bailouts are still on the job. Furthermore, those companies gave their executives a combined $18 billion in bonuses at the end of the year.
A bonus is a reward.
In desire utilitarian terms, rewards are used to promote that which people generally have reason to promote. Condemnation and punishment are used to inhibit that which people generally have reason to inhibit.
People generally have reason to inhibit the type of behavior that these executives engaged in over the past several years, not to promote it. So, that behavior needs to be met with condemnation and punishment, rather than reward or (at best) indifference as the people responsible keep their jobs and live their lives as normal (while millions of others lose their jobs).
So, the quick prima facie recommendation regarding these executives from a desire utilitarian perspective is that they should be told to clean out their offices and leave the company - and new executives should be brought in who will have the duty to bring these businesses back to life.
I have called this system "corporate feudalism". One of its distinguishing characteristics is that it is deemed inappropriate to strip a noble of his title. Regardless of the quality of his leadership, he is still a noble, and thus "entitled" to his throne.
So, we see little movement in the direction of dethroning this particular nobility. Little movement to strip these people of their titles and to remove them from the head of their kingdoms. Instead, in spite of the harms they cause, they keep their thrones and their (political - not moral) right to rule.
By the way, the doctrine of capitalism, for those who understand it, is a philosophy of individual responsibility and would also call for ousting these executives. What we see happening here is not capitalism.
What we see happening is marketed under the name 'capitalism'. It has been marketed under that name to convince people to buy the product. However, the marketing in this case is deceptive.
Unfortunately, this deception produces some collateral damage, when the people who respond to this particular set of injustices takes their anger out on the "fall guy" in this case, instead of the actual culprit.
Ultimately, these executives should be fired and replaced with people who have a track record of taking their moral and business responsibilities seriously.
Why are we giving multi-billion dollar checks to people with a proven track record of losing billions and billions of dollars?