Expecting restrictions on bonus payments, Citigroup and Morgan Stanley are looking for ways to "sidestep the tough new federal caps on compensation", says a media report.
The Wall Street Journal has reported that some Wall Street entities are exploring ways to "sidestep tough new federal caps on compensation".
Quoting people familiar with the situation, the daily said in response to expected bonus restrictions, officials at Citigroup, Morgan Stanley and other financial institutions that got government aid are discussing increasing base salaries for some executives and other top-producing employees.
"The crackdown, part of the economic-stimulus package passed by Congress and signed into law by President Obama last month, limits bonus pay for the top five executives of any recipient of taxpayer capital through the Troubled Asset Relief Program (TARP), plus the 20 next-highest-compensated employees," the daily said in a report published online today.
According to the Wall Street Journal, the discussions are at an early stage, partly because the American government has not yet issued specific rules on the bonus payments that would be allowed at companies that received TARP aid.