In yet another move that is sure to turn Washington and the public against Wall Street, some banks are trying to get around government restrictions on financial firm pay.
According to The Wall Street Journal, "In response to expected bonus restrictions, officials at Citigroup Inc., (C) Morgan Stanley (MS) and other financial institutions that got government aid are discussing increasing base salaries for some executives and other top-producing employees."In other words, these companies will raise what executives get in each paycheck to offset what they will no longer get at the end of the year when incentive compensation is usually paid out.
It sounds like a plan that assumes stupidity on the part of the government. It it also a bad move in light of the uproar over AIG (AIG) pay packages.
It is hard to imagine that the members of Congress who have been pushing for limits on Wall Street pay are going to fall for this, and look at salary increases as anything other than a dodge of their attempts to curtail compensation at companies that have gotten billions of dollars in bailout money.
If Citi and Morgan Stanley go through with the plan, they are likely to face the same kind of wrath that AIG is up against.
Douglas A. McIntyre is an editor at 24/7 Wall St.