We need clawback taxes on financial incompetent bonuses

Posted on March 4, 2009. Filed under: Uncategorized | Tags: , |

I’m ALL in favor of “financial imcompetance” excess bonus taxes, of up to 90% on all bonuses over the last 10 years over 100* last year’s median taxpayer reported income (around $40k? so over $4 mil.), starting at 10% on bonuses over $400k (10* median; also about 1 US President’s salary).

I think such usual clawback taxes should be part of all bankruptcy AND bailouts.

Only when their own assets are on the line will the managers be adequately risk-averse about getting bailout cash or going bankrupt.

I also think bonuses should be more vested over a 4-5 year period.

Pay caps for bailed out firms are also fine –Becker and Posner (against them) notwithstanding

(via Fabius Maximus)

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