Bloomberg News

Oaktree Said to Pay Some Bonuses Early as Tax Hike Looms

December 21, 2012

Oaktree Capital Group LLC (OAK:US), the world’s largest distressed-debt investor, is allowing some employees to receive their bonuses before the end of the year to avoid paying higher taxes, according to a person familiar with the matter.

Oaktree is giving those employees who normally receive their bonuses in February the option to get the payment by Dec. 31, said the person, who requested anonymity because compensation discussions are private. The firm traditionally distributes bonuses to a majority of its employees before the end of the year, the person said.

U.S. income tax rates for top earners and investors will rise next year for the first time since 1993 as a 3.8 percent investment income surtax and a 0.9 percent additional tax on wages take effect as part of President Barack Obama’s 2010 health-care law. In addition, rates on income, capital gains and dividends are scheduled to go up as tax cuts enacted under President George W. Bush are set to expire on Dec. 31 unless Congress acts to avoid the increase.

While Obama and House Speaker John Boehner have traded budget proposals, negotiations remain deadlocked as the end of the year approaches.

Oaktree is telling clients it’s targeting the lowest returns it has ever sought, Chairman Howard Marks said earlier this month. The Los Angeles-based firm, which Marks co-founded in 1995, has more than 700 employees and oversees $81 billion of assets, including distressed and corporate debt, buyout funds, real estate and convertible bonds.

Alyssa Linn, a spokeswoman for Oaktree at Sard Verbinnen & Co., declined to comment.

To contact the reporters on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net Erik Schatzker in New York at eschatzker@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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Companies Mentioned

  • OAK
    (Oaktree Capital Group LLC)
    • $51.58 USD
    • 0.31
    • 0.6%
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