Two key senators Tuesday announced a plan to impose a hefty tax on retention bonuses paid to executives of companies that received federal bailout money or in which the United States has an equity interest.
Sens. Max Baucus, D-Montana, and Chuck Grassley, R-Iowa -- the chairman and top Republican on the Senate Finance Committee -- said companies would not be allowed to restructure the payments to those executives through deferred compensation to avoid the tax.
The senators plan comes after New York Attorney General Andrew Cuomo confirmed in a letter to Congress that this year, after receiving federal bailout money, AIG paid 73 employees bonuses of more than $1 million each.
Cuomo also wrote that 11 of the employees no longer work for the company. The largest bonus paid was $6.4 million; seven other people also received more than $4 million each.
AIG is under fire for awarding the bonuses while being kept afloat by more than $170 billion from the U.S. government's financial bailout. Watch congressional reaction to AIG bonuses Read full article »
CNN's Ted Barrett, Dana Bash and Elaine Quijano contributed to this report.