This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bonus Tax Panned by Bank Sector Analysts

Financial services sector analysts panned a House bill that would impose a 90% tax on bonuses for bank executives making more than $250,000 a year, saying the measure is misguided and could have unintended consequences.

The House on Thursday overwhelmingly passed legislation that would retroactively tax bonus payments to the employees making more than $250,000 at companies that have received more than $5 billion from the Troubled Asset Relief Program, or TARP. The measure came after it was discovered that American International Group (AIG - Get Report) made over roughly $165 million in bonus payments to employees, even as the troubled insurance firm accepted billions in bailout funds.

Congressional members, regulators and investors have been critical of other firms that doled out bonus payments to their employees in the wake of the financial crisis. NY State Attorney General Andrew Cuomo is probing Merrill Lynch's accelerated payments of bonuses late last year, just prior to its sale to Bank of America (BAC - Get Report).

But the analysts say that executive pay packages are the least of the worries for financial regulators these days.

Nancy Bush, in an industry note titled "Animal House," says that the "unintended consequences" of the House's actions will result in well positioned banks to "rush to exit TARP."

Banks like JPMorgan Chase (JPM - Get Report), Wells Fargo (WFC - Get Report) and others "will seek avenues to get out as quickly as the stress-tests results allow," she writes.

Already several smaller banks have stated their intentions to exit TARP including TCF Financial (TCB) and Iberiabank Corp. (IKBC), among others.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AIG $63.15 0.00%
C $54.08 0.00%
BAC $17.44 0.00%
JPM $66.86 0.00%
WFC $55.22 0.00%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs