Wednesday, April 1, 2009

WaMu staff promised retention bonuses to aid JPMorgan transition may face big tax

Hundreds of former Washington Mutual employees, expected to lose their jobs this year after working temporarily as part of JPMorgan Chase's transition team, could get winged by the congressional shotgun blast aimed at recouping multimillion-dollar bonuses paid to executives at insurance giant American International Group.

Employees return to Washington Mutual's downtown Seattle corporate headquarters in December after attending a meeting with JPMorgan Chase CEO Jamie Dimon.

That's because the retention bonuses JPMorgan Chase promised those workers to get them to stick around would be taxed heavily under either of two bills in the Senate.

The bills were a response to popular outrage after the disclosure last month that AIG, which has received more than $170 billion in federal bailout aid, paid $165 million in bonuses.

Much of that money went to employees in the AIG unit that sold the complex financial instruments blamed for getting the insurer into trouble in the first place.

Although momentum on the bonus-tax bills appears to have slowed, former WaMu workers are concerned they might lose much of the money they were counting on to tide them over after they're laid off.

"These are not the big decision-makers leading a lavish lifestyle," said one transitional employee who spoke only on condition she not be identified. "These are regular people."

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