US banker bonuses to be paid early due to tax fears [View All]

[The Straight Story]

US banker bonuses to be paid early due to tax fears


US Banks may choose to pay bonuses early to avoid payouts being affected by potential new taxes, a newspaper report has revealed.

According to the New York (NY) Times, the authorities are negotiating whether rules introduced during George Bush’s presidency providing tax cuts to high earners should be extended during next year.

If the legislation is not extended, then many banks are fearful that the size of bonus packages for senior executives will be reduced.

Unnamed sources cited by the NYTimes said that Goldman Sachs is currently deliberating when would be best to make the pay outs while similar talks are believed to be occurring at other financial institutions.

Brian Foley, a pay consultant in White Plains, told the newspaper: “This has been a topic of conversation among those of us who are involved in designing and administrating compensation plans.

“But I really would be surprised if anyone went down this path. This is a bounce-back year in terms of bonuses going up and probably not the time to draw attention to yourself.”

If the rules are not extended, a worker on a $1 million salary could pay up to $50,000 extra during 2011 when compared to the amount paid in 2010.

http://www.bobsguide.com/guide/news/2010/Dec/7/US_banker_bonuses_to_be_paid_early_due_to_tax_fears.html