TARP Bonus -continued

MWR -

Oh, I am worried... MegaBank made several payments that fall under this "disqualified" amount

1) the standard time for service (which wouldn't count)
2) a "transition payment" that is a matching salary payment from 10-1-2008 to the last day of service (counts)
3) a 2008 annual bonuses paid in January (maybe)
4) A pro-rated 2009 bonus. (most likely)

The Adjusted Gross Income (AGI) limit seems reasonable however, it is easily surpassed - due to the combined severance/transition/bonus monies/unused vacation/salary/new job and spouse's income.

We are consulting an accountant on May 11th.

I am aware that this bill is not yet final, but the outrage about the million $ bonuses is reasonable and I can't see the bill falling dead. But, I feel a bit targeted.

One of the things that gets me is that if I didn't get a job, the AIG limit would be so far out of reach that it would be a moot point. But I did, so that means I'll pay extra taxes (if the bill passes.) Might I be better off not working? That is the childish emotional response, of course it is better to work even if I end up paying an unfair amount of taxes on a portion of my annual income.

I know that it is insanity to air my financial situation for the world to see, but this situation is beyond unusual. These "bonuses" have been part of the financial industry compensation for the last 50 years. Does that mean it's 'right'? I don't know. Severance payments, retention bonuses, annual bonuses are all part of business; they are not localized to the failing financial industries. If payments that entice an employee to stick around and work even though they know they aren't wanted is wrong then ban them across the board. That means in the telecom industry, the manufacturing and any other big business.

These payments are a way of saying "We know you can get a job but we need you for a short period of time, stay and we'll make it worth your while." In my case it was to transition some regulatory items over, but for most of my peers it was to support critical services until they were eliminated. Everyone I knew on the transition team (except for me) was working twice as hard and with more challenges than they had been before the "sale." These folks could get work right away and several turned down offers to move on before their end date - thus making the incentive payment successful.

I did think it was odd to get a bonus for 2008 considering the fate of MegaBank - but they did cancel out 50% because of company performance. They had/have a formula for how bonuses are calculated - 50% based on employee performance and 50% on company performance. Folks who worked on the money side were paid far less if anything because their 'performance' was tied to sales and clearly when the market tanks you can't argue good performance. However, can you say that the folks who processed the back office activities with less staff, same or better up time, and less budget didn't perform well? I don't think so.

The other thing that comes to mind for me anyway, is that not all these companies are "AIG" - accepting billions and still not performing. The MoreMegaBank that the FDIC gave MegaBank to accepted some TARP monies, but it wasn't used to keep the company alive. (If these companies used the TARP monies inappropriately, then they should pay it back - not the silly technology employee.)

Anyway... the bill hasn't passed. I feel fortunate to be whining about this because I am aware that even though this may be the only time in my life that my income may even come close to this amount that I am doing very well financially. I'll pay off my debt and put the rest in the bank and hope that at the end of the year we can use is towards the purchase of a home.

In the mean time, I'll continue to write my congress persons.