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Bonus clawback madness, cont'd

  • "Did TARP Pay Caps Chase Out Two Famous Merrill Bears?" (John Carney).
  • Megan McArdle finds the story of the AIG bonuses a lot more complicated than Congress made it sound. Per the ABA Journal, "Lawyers at Paul, Hastings Warned of Double Liability" if the firm failed to pay the promised compensation. Connecticut has a relatively liberal, pro-worker statute which pressures employers to fork over compensation for work done even if they believe it falls into a gray area, and there is an obvious irony involved here: a populist-minded statute turns out to have operated to dissuade the company from doing what populists wanted it to do on the bonuses. Perhaps that helps explain why Connecticut AG Richard Blumenthal took such a snappishly belligerent, not to say defensive, posture. As Daniel Schwartz recalls, Connecticut employers have indeed run seriously afoul of this law in the past.
  • Giving back your retention payments, as Richard Belzer explains, unfortunately doesn't mean that you'll necessarily escape taxes on them (via Taranto).

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.