US Banking chiefs slam bonus tax bill: Report

The chief executives of the America's three financial majors, including Citigroup, have criticised legislation that would levy 90 per cent tax on bonuses granted to employees, a media report said today.

The chiefs of nation's three banks -- Citigroup, Bank of America and J P Morgan -- have criticised the legislation passed by the House of Representatives on Thursday.

Citing a memo to employees, The Wall Street Journal said, Citigroup's CEO Vikram Pandit and Bank of America's Kenneth Lewis both have criticised the tax legislation as it would make it hard to retain workers.

While J P Morgan Chase & Co's CEO Jamie Dimon reassured his 200 top executives in a conference call that the bank is actively engaging Washington on the matter, it added.

As per the legislation, a 90 per cent tax would be imposed on bonuses granted to employees with household income of more than 2,50,000 dollar at companies that received at least five billion from the government's TARP.

According to the WSJ, Pandit wrote in his memo that the proposals would affect "countless" people, who would find it difficult to repay their bonuses.

He noted that not all workers in financial services field are to blame for the current economic morass, adding that banking giant removed people who are responsible for the company's distress and acted quickly to streamline its business, it added.

Quoting Pandit's memo to his employees, the daily said: "The work we have all done to try to stabilise the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial services employees."

Besides, Bank of America's Lewis said that his "first concern is about basic fairness to our associates." He further said that the bank is "part of the solution for the financial crisis" through its acquisitions of distressed Countrywide Financial and Merrill Lynch, the Journal said quoting an internal memo.

Lewis further wrote in the memo, the proposed bonus tax is "terribly unfair", adding Many employees "had nothing to do with creating today's problems.... I am concerned about our ability to retain some of out most valuable employees.... None of you (employees) deserve to have even more compensation taken away," the report added.

J P Morgan's Dimon said retention remains important to the company and it is actively engaging legislators in Washington. He encouraged them to call their local politicians to tell them how they feel, a spokesman of the company confirmed to the WSJ.