Liddy's $1 salary begs the question is he due for some huge bonus when his job is done?

[C......N......C]

I find it hard to believe that his only pay for his job as head of AIG is only going to net him $1.

[supernova]

1. That's a legit question

in light of the other arrangements.

It sounds like it was all an elaborate tax avoidance scheme.

What's the tax rate on a "bonus" as opposed to salary at that level?

[Hello_Kitty]

3. It's the same. Ordinary income. I made the mistake last week of assuming it was higher.

Depending on how you have withholding set up, a bonus can be withheld at a higher rate but it all comes out in the end. I'd expect that the kind of bonus Liddy gets would be taxed at the maximum 35% marginal rate.

[C......N......C]

6. So he is not working for $1.

[Hello_Kitty]

11. Well, it depends on if he gets a bonus and how much it is. eom

[LiberalFighter]

15. All of it would not be taxed at 35% if he received any type of income.

[Hello_Kitty]

2. I don't care if they get huge bonuses if they fix the problem

I do have a problem with TARP recipients getting automatic bonuses just for gracing us with their presence.

[C......N......C]

5. This is what got us here in the first place.

"I don't care if they get huge bonuses if they fix the problem" Nobody cared what they did as long as they made the stockholders money.
20% market growth !

[Hello_Kitty]

10. I'm not arguing the same thing. eom

[Journeyman]

4. $742,006.40, after taxes -- paid on March 16 . . .

this is on the second page of the NYT piece.

So no, he didn't agree to work for $1 a year -- he agreed to work for two paychecks a year: $1 up front, bookoo bucks at close.

[C......N......C]

7. They made reference to the $1 at the hearings, thanking him for it !

[Statistical]

9. Did you read the article?

That wasn't Liddy bonus. That was the bonus of the man who wrote an open letter TO Liddy in NYT.

[DeepBlueC]

14. you're not talking about Liddy

That's Jake DeSantis.

[jljamison]

8. I don't care either

If Liddy succeeds in selling off chunks of AIG and bringing the company and its stock price back up such that the 80% stake owned by the taxpayers can be sold either to recoup the 180 billion invested, or even make some money, he deserves a huge bonus. Perhaps though he should get a bonus in the form of stock options that vest over time, so that he has to manage he recovery for the long term, rather than a single quarter.

[C......N......C]

12. You know, I don't care either what he gets, but why are they saying

he is doing it for $1. There has to be something behind this. I believe that he will get something worth a lot more than $1, but why are they parading the $1.

[C......N......C]

13. I have goggled and can't find an answer to what Liddy is going to get

or why he is really doing it.

[On the Road]

16. It's the Lee Iacocca Precedent

Iacocca took $1 salary as Chrysler CEO but was compensated on the back end after resuscitating the company.

I would personally not object to a similar arrangement for AIG provided that the company is genuinely improved, but not as a cover for rewarding poor performance.

[LiberalFighter]

17. Congress needs to reverse the law regarding credit default swaps

that got passed in 2000. Listening to NPR on the way home about how it got passed. Wendy Gramm wife of former Phil Gramm was involved in deregulating this scam. As described, credit default swaps are side bets on whether someone will default on their loans. Which were I believe he stated illegal at the time.

[C......N......C]

18. Weren't credit swaps illegal and that was the law that made it legal.