Wall St. Looks to Skirt Bonus Limits With Padded Salaries
Attempt to skirt new rules could anger shareholders
By Matt Cantor,  Newser User
Posted Mar 17, 2009 8:14 AM CDT
Morgan Stanley is considering raising base salaries.   (AP Photo)
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(Newser) – In a move to skirt government restrictions on executive pay for recipients of bailout cash, some Wall Street companies are discussing raising base salaries, the Journal reports. Citigroup and Morgan Stanley are considering the idea, which is gaining currency as regulators keep a watchful eye on bonuses, say industry insiders. Higher base salaries could actually help boost bonuses, typically a percentage of salary.

Traders and bankers typically earn between $200,000 and $1.5 million a year, with the bonus making up the majority of their pay. Clamping down could be dangerous, killing performance-based pay, say some experts. But “any attempt to curb pay excess by just putting it in a different pocket and calling it something else” could spark a shareholder backlash, says an analyst.