Title: The credit crisis and corporate governance: excessive bonuses of TARP banks

Authors: Marco G.D. Guidi, Reza Kouhy

Addresses: Division of Accounting, Finance and Risk, Glasgow Caledonian University, Cowcaddens Road, Glasgow, G4 0BA, UK. ' Dundee Business School, University of Abertay Dundee, Bell Street, Dundee DD1 1HG, UK

Abstract: Maximising TARP banks| value to society would require the integration of all stakeholders rights and |moral debt| (obligations) claims providing justice in protecting and distributing alienable and inalienable rights as well as their associated benefits and costs. For instance, the TARP banks that maximise their value only for an elite group through excessive bonus payments to executives incur |moral debt| claims from other stakeholders, which will make the firm less valuable to society. This study shows that the unjust redistribution of rights through compulsory layoffs, whilst making excessive executive bonus payments reduces the value of TARP banks to society.

Keywords: TARP banks; trouble asset relief programme; banking; excessive bonuses; compulsory lay-offs; rights redistribution; moral debt; corporate governance; credit crisis; bonus payments; executive bonuses; value to society.

DOI: 10.1504/IJCG.2009.032725

International Journal of Corporate Governance, 2009 Vol.1 No.4, pp.366 - 381

Published online: 18 Apr 2010 *

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