Tax on retention bonus
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[quote=feebasedrep]What about the Merrill,SB, and MS brokers who have already spent their bonuses…and does this mean everyone goes to UBS and Janney for the "recruitment bonus???[/quote]
I guess you missed this
FORBES
Brian Wingfield and Joshua Zumbrun,
<span =“date”>03.17.09, 07:00 PM EDT
Sen. Robert Menendez, D-N.J., expanded the battlefield Tuesday, calling
on the Obama administration to halt $3 billion in similar payments to
financial advisers at <span =“tickerlinx”>Morgan Stanley
(nyse:
MS -
news
-
people
).
“The retention payments at AIG and Morgan Stanley are both essentially
the same form of extra compensation, and they are not fully necessary
to retain executives in this tough financial market,” Menendez told
Treasury Secretary Timothy Geithner
in a letter. He’s called on the administration to use “every legal
means available” to stop the payments, which are scheduled to be
awarded in January 2010.
If you read the legislation it states it will not apply to commissions. They could rewrite our contracts to call them commissions paid?? There will be loopholes.
They cant say commissions paid? That would be "paid" and no chance for firms to recover. This would be an amazing mess with getting back up front deal money also. We brought over a 5 person team of 2.5 million in Jan. They were going nuts today worried about what it would mean, manager was telling them it could get dicey. Nightmare coming up for 1000's of reps who got money in 2009, or due money down the road on backend deals.If you read the legislation it states it will not apply to commissions. They could rewrite our contracts to call them commissions paid?? There will be loopholes.
1,000,000 worth of deferred commish!! My bet is they say "sorry cant give money now"...with no bonus deals for recruits it wont hurt them.. Think the way I read it, the pikers are good to go, because they fit under the 250K income including bonus threshold!!Easy fix…deferred commissions.
They are forgivable “loans”.
You “earn” it through production and time with firm in future.
Hell, one thing you can say about us is we earn our MF money.
This proposed legislation, if passed by the Senate and signed by the president as currently written, will surely be tested in the courts. I believe the courts would strike it down as illegal for a number of reasons, many of which are being discussed in various blogs and talk shows. The ultimate fall guy will be Geitner, who stated that he takes full responsibility for the loophole that allowed for the bonus payments. The President along with the liberal congress is going too far with their socialist agenda and it will backfire on them. It’s going to take time…but this will eventually come back and bite them hard.
[quote=now_indy][quote=Valhalla]Article 1, Section 9 of the US Constitution
http://www.constitution.org/constit_.htm GO![/quote] I assume you're referring to the "bill of attainder," as in: A bill of attainder (also known as an act or writ of attainder) is an act of legislature declaring a person or group of persons guilty of some crime and punishing them without benefit of a trial. Bills of attainder are forbidden by Article I, section 9, clause 3 of the United States Constitution. Good call, that's exactly what it is. [/quote] yes. thank you. going to be interesting to see how this plays out in the courts over the next few months.This is all a big distraction from dealing with the real problem that Obama and minions now have in their lap re: buffoons in the legislative branch that speak for their party and are driving the agenda right now coupled with the farce at the Treasury Dept...the tax is unconstitutional and won't pass, simple truth....
This is an anti-business, big government administration. We'll see how voters feel about it next year and 2012...The Revolution Begins.Morgan Stanley should scrap $3 billion bonuses: senator
Wed Mar 18, 2009 7:01am EDT Email | Print | Share | Reprints | Single Page [-] Text [+]
By Jonathan Stempel
NEW YORK (Reuters) - Morgan Stanley (MS.N) should be barred from paying as much as $3 billion to entice brokers to stay when the company and Citigroup Inc (C.N) merge their brokerage operations, U.S. Senator Robert Menendez said.
In a Tuesday letter to U.S. Treasury Secretary Timothy Geithner, Menendez, a New Jersey Democrat, urged the government to use “every legal means available” to stop the payouts as long as Morgan Stanley receives support from taxpayers.
“These payouts constitute misuse of taxpayer money,” Menendez wrote. "Some on Wall Street don’t understand that they, more than anyone, cannot be permitted to carry on with business as usual. These times demand shared sacrifice."
The senator said the payouts, like bonuses paid at troubled insurer American International Group Inc (AIG.N), are “essentially the same form of extra compensation” and are "not fully necessary to retain executives in this tough financial market."
Morgan Stanley has taken $10 billion and Citigroup $45 billion from the government’s Troubled Asset Relief Program (TARP).
Christy Pollak, a Morgan Stanley spokeswoman, said each award is “not a bonus,” but is a nine-year “forgivable loan” that must be paid back if a broker leaves sooner.
“The program is necessary because our financial advisers are being poached by competitors,” Pollak said. The cost is covered by operating revenue of the joint venture and not government TARP money."
About 6,500 of the venture’s 20,000 brokers are expected to be eligible for awards, which would be made in 2010 and 2012.
Retention awards are paid to keep brokers from defecting after a company is bought. Financial companies getting taxpayer money are facing heavy pressure from Congress and regulators to limit pay.
“If you want this venture to succeed, then this type of award is necessary,” said Danny Sarch, founder of recruiting firm Leitner Sarch Consultants Ltd in White Plains, New York. "If the awards are cut back, they will have dramatically more attrition than they would otherwise. The rest of the industry would have a field day in recruiting."
Under the payout plan, brokers who generate at least $1.75 million in revenue a year may get awards equal to 105 percent of their annual production, a person familiar with the plan said last month. The person was not authorized to publicly discuss details of the plan.
Wells Fargo & Co (WFC.N), which bought Wachovia Corp at the end of 2008, said last month it will not issue retention awards to about 14,600 brokers from Wachovia’s brokerage arm, Wachovia Securities.
Morgan Stanley is paying Citigroup $2.7 billion for an initial 51 percent stake in their venture, and may take full control after five years. A closing is expected this summer.
A Treasury Department spokesman was not immediately available for comment.
(Reporting by Jonathan Stempel, editing by Gerald E. McCormick and Jeffrey Benkoe)
wow. anyone thinking about taking a check should probably jump. we are under siege.
i guess this crap will make d*** head Stumhp and MF WFC look smart
Who would pay you to leave, that would be a bonus?? WFC, BAC, MS, SB, BAC can not give a bonus..Guess UBS could be the only one who could recruit, could get crowded and would think they could give guys 50% if they wanted and people would have no choice but to say where do I sign??Morgan Stanley should scrap $3 billion bonuses: senator
Wed Mar 18, 2009 7:01am EDT Email | Print | Share | Reprints | Single Page [-] Text [+]
By Jonathan Stempel
NEW YORK (Reuters) - Morgan Stanley (MS.N) should be barred from paying as much as $3 billion to entice brokers to stay when the company and Citigroup Inc (C.N) merge their brokerage operations, U.S. Senator Robert Menendez said.
In a Tuesday letter to U.S. Treasury Secretary Timothy Geithner, Menendez, a New Jersey Democrat, urged the government to use “every legal means available” to stop the payouts as long as Morgan Stanley receives support from taxpayers.
“These payouts constitute misuse of taxpayer money,” Menendez wrote. “Some on Wall Street don’t understand that they, more than anyone, cannot be permitted to carry on with business as usual. These times demand shared sacrifice.”
The senator said the payouts, like bonuses paid at troubled insurer American International Group Inc (AIG.N), are “essentially the same form of extra compensation” and are “not fully necessary to retain executives in this tough financial market.”
Morgan Stanley has taken $10 billion and Citigroup $45 billion from the government’s Troubled Asset Relief Program (TARP).
Christy Pollak, a Morgan Stanley spokeswoman, said each award is “not a bonus,” but is a nine-year “forgivable loan” that must be paid back if a broker leaves sooner.
“The program is necessary because our financial advisers are being poached by competitors,” Pollak said. The cost is covered by operating revenue of the joint venture and not government TARP money."
About 6,500 of the venture’s 20,000 brokers are expected to be eligible for awards, which would be made in 2010 and 2012.
Retention awards are paid to keep brokers from defecting after a company is bought. Financial companies getting taxpayer money are facing heavy pressure from Congress and regulators to limit pay.
“If you want this venture to succeed, then this type of award is necessary,” said Danny Sarch, founder of recruiting firm Leitner Sarch Consultants Ltd in White Plains, New York. “If the awards are cut back, they will have dramatically more attrition than they would otherwise. The rest of the industry would have a field day in recruiting.”
Under the payout plan, brokers who generate at least $1.75 million in revenue a year may get awards equal to 105 percent of their annual production, a person familiar with the plan said last month. The person was not authorized to publicly discuss details of the plan.
Wells Fargo & Co (WFC.N), which bought Wachovia Corp at the end of 2008, said last month it will not issue retention awards to about 14,600 brokers from Wachovia’s brokerage arm, Wachovia Securities.
Morgan Stanley is paying Citigroup $2.7 billion for an initial 51 percent stake in their venture, and may take full control after five years. A closing is expected this summer.
A Treasury Department spokesman was not immediately available for comment.
(Reporting by Jonathan Stempel, editing by Gerald E. McCormick and Jeffrey Benkoe)
wow. anyone thinking about taking a check should probably jump. we are under siege.
i guess this crap will make d*** head Stumhp and MF WFC look smart
Obama administration is using this as another oppurtunity to get the masses all fired up at wall street and the wealthy.
they knew about these bonuses for months and congress even agreed to them.
Obama administration wants to pass laws so they can tax certain groups at crazy levels. They are not doing this to get back at AIG. They are doing this to set a precedent for the future.
This is socialism. The government will be able to pick certain companies and certain people to tax at special rates.
There needs to be a serious revolution in this country. Capitilism is going away at a very, very fast pace.
I don’t agree with AIG getting bonuses like this when they got that much money, but the precedant that is about to be set is unbelievable.
These stupid idiot liberal congressmen jerk offs.
john mack will give that money back soon.
mack is the man
[quote=Hydeho] [quote=feebasedrep]What about the Merrill,SB, and MS brokers who have already spent their bonuses…and does this mean everyone goes to UBS and Janney for the "recruitment bonus???[/quote]
I guess you missed this
FORBES
Sen. Robert Menendez, D-N.J., expanded the battlefield Tuesday, calling on the Obama administration to halt $3 billion in similar payments to financial advisers at Morgan Stanley (nyse: MS - news - people ). "The retention payments at AIG and Morgan Stanley are both essentially the same form of extra compensation, and they are not fully necessary to retain executives in this tough financial market," Menendez told Treasury Secretary Timothy Geithner in a letter. He's called on the administration to use "every legal means available" to stop the payments, which are scheduled to be awarded in January 2010.
[/quote] I'm just glad that Senator Menendez knows that payments "are not fully necessary to retain executives." He must be a genius. He probably knows just how many miles per gallon are "necessary" for my car to get, and just how much water is "necessary" to flush my toilet, and just how many calories are "necessary" in my BigMac, or just how much money is "necessary" for me to make, or just how much government cheese is "necessary" for my family ... These guys must have some type of God syndrome, where they think their opinion is fact. I can't wait until 2010, and some of these goobers will get a wake up call. Chris Dodd, enjoy your two last years in the Senate.
congressman should have to pay back all of the politcial contributions from companies that got tarp funds. the clawback should go back 10 years.
if every congressman returns every nickel via campaign contributions received from tarp recipients immediately in a single lump sum, this would almost be palatable. the likelihood these crooks see their frivilous law apply to themselves is nil.
keep in mind that this legislation renders insolvent any contract ever written. the impact is beyond the scope of imagination. the usa is a banana republic in the making and civil war may be the end result. at least you won't have to pay your bills anymore since the contract is irrelevent... worst presidential administration in history and not even 2 months in office...congressman should have to pay back all of the politcial contributions from companies that got tarp funds. the clawback should go back 10 years.
good call
I guess Merrill knows the proper palms to grease since this proposal would not affect their bonuses since it occurred before Dec. 31. How simple it would be for the affected firms to take the money back and say it wasn’t their fault. If you recently moved to a firm how would you explain to your clients that you are moving their accounts again? I guess you would just tell them that the $1 million plus you recvd was taken away. NOT
What a sweet deal for these firms. Have you ever thought that these firms may be secretly backing this legislation behind closed doors?
Just food for thought.
[quote=Apollo 13] I guess Merrill knows the proper palms to grease since this proposal would not affect their bonuses since it occurred before Dec. 31. How simple it would be for the affected firms to take the money back and say it wasn’t their fault. If you recently moved to a firm how would you explain to your clients that you are moving their accounts again? I guess you would just tell them that the $1 million plus you recvd was taken away. NOT
What a sweet deal for these firms. Have you ever thought that these firms may be secretly backing this legislation behind closed doors?
Just food for thought. [/quote]
it is coming. a reason for them all to stop. UBS will be only one and deals will drop big time. WFC started it