NEW YORK (Dow Jones)--The U.S. Senate's proposed legislation that attacks Wall Street compensation might not mean the end of all bonuses for brokers.
The bill, which is on the agenda this week, would impose a 70% surtax on so-called "excessive bonuses" - half on employees and half on banks that received bailout funds from the federal government. The tax, while less damaging than a similar measure passed by the House of Representatives on Thursday, would extend to more employees and firms than that bill.
While both bills appear to encompass broker retention payments, language in the Senate bill could provide a loophole for signing bonuses. According to the legislation, the tax applies to bonus payments "attributable to services performed by such individual during any preceding calendar year."
Kenneth Raskin, head of White & Case LLP's global executive compensation, benefits and employment law practice group, said the Senate bill, in its current form, seems to exclusively address rewards for past performance.
"If you sign a contract for me and I just give you money for signing the contract, you haven't performed any services yet ... it's a technical interpretation, but it's also the right one under the language," Raskin said.